CONSTRUCTION CONTRACTS (Hansard, 8 July 1996)

§ Mr. Robert B. Jones
I beg to move amendment No. 74, in page 58, line 32, leave out from 'agreement' to end of line 33 and insert 'with a person for any of the following—
(a) the carrying out of construction operations;

(b) arranging for the carrying out of construction operations by others, whether under sub-contract to him or otherwise;

(c) providing his own labour, or the labour of others, for the carrying out of construction operations.
(1A) References in this Part to a construction contract include an agreement—
(a) to do architectural, design, or surveying work, or

(b) to provide advice on building, engineering, interior or exterior decoration or on the laying-out of landscape,
in relation to construction operations. 92 (1B) References in this Part to a construction contract do not include a contract of employment (within the meaning of the Employment Rights Act 1996). (1C) The Secretary of State may by order add to, amend or repeal any of the provisions of subsection (1), (1A) or (1B) as to the agreements which are construction contracts for the purposes of this Part or are to be taken or not to be taken as included in references to such contracts. No such order shall be made unless a draft of it has been laid before and approved by a resolution of each of House of Parliament.'.

§ Mr. Deputy Speaker
With this, it will be convenient to discuss Government amendments Nos. 75, 80, 81 and 101.

§ Mr. Jones
Our aims here are merely to improve the clarity of the Bill's wording and, at the same time, to include non-professional design and consultancy work. That objective reflects the debate and undertakings in Committee, as well as the representations that we have received. I commend the amendments to the House.

§ Sir Sydney Chapman (Chipping Barnet)
I beg to move amendment No. 117, in page 58, line 40, at end insert— '(3A) This Part shall not apply to any—
(a) joint venture or partnership agreement entered into for the purpose of carrying out construction operations for a third party;

(b) loan agreement, mortgage, charge or debenture entered into for the purposes of financing construction operations; or

(c) agreement which relates to construction operations and other matters where the consideration for the construction operations is included in—

(i) any amount payable in respect of the grant or transfer of an interest in land made or agreed to be made under the agreement, or

(ii) any amount payable in respect of the operation or management of the asset created by the carrying out of the construction operations;
which could otherwise be construed as a construction contract.'.

§ Mr. Deputy Speaker
With this, it will be convenient to discuss Government amendments Nos. 82 and 83.

§ Sir Sydney Chapman
This amendment was tabled by my hon. Friend the Member for Bournemouth, West (Mr. Butterfill), who unfortunately has an inescapable parliamentary duty elsewhere in the Palace.
I need not rehearse the arguments for this amendment to my hon. Friend the Minister. We have been struggling to find the right definition of construction contracts, and we have tried to move the boundary to here on one occasion and to extend it to there on another occasion. Despite the silent eloquence of my hon. Friend. I think that there are still many items that should not be in the Bill, and it would be agreeable that they should not be in it.
93 Amendment No. 117 seeks to ensure that loan agreements, development agreements, and lease and concession agreements under the private finance initiative, for example, should be excluded from the definition of construction contracts.

§ Mr. Robert B. Jones
First, perhaps I should say that Government amendment No. 82 is to block the so-called "penthouse" loophole. I am sure that all hon. Members will welcome that provision, although I do not think that the loophole was likely to arise.
As for the comments of my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) on amendment No. 117, of course our intention is not to catch matters that are not related to construction. We are considering ways in which we can help with the concerns expressed by him and by my hon. Friend the Member for Bournemouth, West (Mr. Butterfill).
I must bear in mind, however—as my hon. Friend the Member for Chipping Barnet will understand—the need not to create loopholes in construction work that can be wriggled through. On that basis, perhaps he will accept the assurance that I should like to meet the substance of his concerns, but that I must have a very careful look to ensure that we are not creating some unintended consequence.

§ Mr. Peter Griffiths (Portsmouth, North)
I did not have the pleasure of serving on the Committee, although I had been active in promoting the idea of a construction contracts Bill for many months before it appeared. Since it has been produced, the one matter of concern to those involved in the many multifarious activities that come under the heading of contracts has been that the Bill should be related specifically to what those in the construction industry regard as construction contracts.
Although I strongly support the two Government amendments grouped with amendment No. 117, and the clarification that the Minister has been able to offer, can he say whether the Government amendments meet the requirements of the Constructors Liaison Group, as that would be a great confidence booster for the industry.

§ Sir Sydney Chapman
In view of what the Minister has said, I beg to ask leave to withdraw the amendment.