Housing Grants, Construction and Regeneration Bill [H.L.]

HL Deb 23 July 1996 vol 574 cc1316-56

4.58 p.m.

The Minister of State, Department of the Environment (Earl Ferrers)

My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Commons amendments to the Housing Grants, Construction and Regeneration Bill, have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

I beg to move that the Commons amendments be now considered.

Moved, That the Commons amendments be now considered.—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENTS AND AMENDMENTS TO BE MOVED ON CONSIDERATION OF COMMONS AMENDMENTS

[The page and line refer to Bill (118) as first printed by the Commons.]

COMMONS AMENDMENTS

1 Clause 3, page 3, line 7, at end insert— `( ) a health authority, special health authority or NHS trust;'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment Nos. 1. I shall also speak to Commons Amendments Nos. 2, 3, 38, 39, 40, 45, 61, 63 and 64.

Amendments Nos. 1, 2, 38 and 39 ensure that certain NHS authorities and trusts, and police authorities which are established under Section 3 of the Police Act 1964 are excluded from eligibility for grants under Chapter I of Part I of the Bill, and from participating in a group repair scheme as an assisted person. Amendments Nos. 1 and 38 respond to concerns which were expressed in Committee in another place that those health service bodies should be shown on the face of the Bill as bodies which cannot apply for grant.

Amendments Nos. 61, 63 and 64 provide that the references to new town corporations, housing action trusts and urban development corporations in the lists of ineligible applicants in Clauses 3(2) and 64(6) in Part I, shall be construed as references to their successor bodies which would be created under Clauses 139 to 141 of this Bill.

Amendments Nos. 3, 40 and 45 concern eligibility to apply for renovation grants and other grants under Chapter I of Part I of the Bill, to participate in a group repair scheme or to receive home repair assistance. To be eligible for all those purposes, applicants will have to pass a means test, the provisions for which will be set out in regulations. Broadly speaking, we have sought to make renovation grants and the other benefits given for private sector renewal available to people whose circumstances are equivalent to those who are entitled to housing benefit.

Amendments Nos. 3, 40 and 45 will enable the regulations to reflect the housing benefit rules in relation to matters other than the applicant's means. There has been a gap in the legislation on that so far and the amendments make a logical extension of the present provisions. They will ensure that the provisions for private sector renewal will, where appropriate, keep broadly in line with housing benefit. One such area relates to asylum seekers and other people who are subject to immigration control. The amendments will enable the regulations to make similar provisions to those for housing benefit regarding the eligibility of such people.

The purpose of the grant system under this Bill is to give people help with repairs and improvements so that their homes can be made fit so that they can go on living there. It is, of course, unlikely that many people who are covered by immigration controls will qualify for grants: they will need to own a home, and, in most, but not all, cases, will need to have lived there for three years. However, these amendments will ensure that in the unlikely cases where asylum seekers and other people who are subject to immigration control do jump all those hurdles, the rules governing their eligibility for grants will be the same as those governing their eligibility for housing benefit.

Moved, That the House do agree with the Commons in their Amendment No. 1—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

2 Clause 3, page 3, line 7, at end insert— `( ) a police authority established under section 3 of the Police Act 1964;'.

3 Page 3, line 15, at end insert— `( ) Regulations under subsection (3) may proceed wholly or in part by reference to the provisions relating to entitlement to housing benefit, or any other form of assistance, as they have effect from time to time.'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 2 and 3.

Moved, That the House do agree with the Commons in their Amendments Nos. 2 and 3—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

4 Leave out Clause 4 and insert the following new clause—

HOUSING GRANTS: THE AGE OF THE PROPERTY

'.—(1) A local housing authority shall not entertain an application for a grant in respect of premises provided (by construction or conversion) less than ten years before the date of the application, unless—

1. (a) the application is for a disabled facilities grant, or
2. (b) the application is for an HMO grant in respect of a house in multiple occupation provided by conversion.

(2) The Secretary of State may by order amend subsection (1) so as to substitute another period for that specified.'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 4. I shall also speak to Amendment No. 7.

New Clause 4 responds to concerns expressed in Committee in another place. It permits grant to be given for HMOs even where they have been converted less than 10 years ago. It removes the 10-year age requirement—provided for in Clause 4—for houses in multiple occupation which are provided by conversion.

The effect of not relaxing the provisions of Clause 4 for houses in multiple occupation which have been provided by conversion would be that occupiers of those premises might have to wait up to 10 years for a grant-aided improvement to their living conditions.

Amendment No. 7 adds a new subsection to Clause 12. The new subsection allows renovation grant to be approved for fire precautions works to a self-contained dwelling forming part of an HMO where those works have been specified in a notice served on the HMO under Section 352 of the Housing Act 1985. Prior to the amendment (as is the case under the present legislation), no kind of mainstream renovation grant would have been available for fire precautions works to self-contained dwellings in such cases.

Moved, That the House do agree with the Commons in their Amendment No. 4—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

5 Clause 7, page 4, line 35, leave out from 'State' to end of line 36 and insert— 'References in this Chapter to tenants and other expressions relating to tenancies, in the context of a tenant's application for a renovation grant, shall be construed accordingly.'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No.5. It may be convenient if I speak at the same time to Amendments Nos. 6, 8, 9, 18 to 23, 31, 37, 42, 43 and 62.

The purpose of Amendments Nos. 5, 6, 8, 9, 31, 37, 42, 43 and 62 is to ensure that references to "tenant" and "qualifying tenant" and such similar terms in Part I of the Bill shall be construed as including a person who has a licence to occupy a dwelling or a tenancy of a description which may be specified by the Secretary of State.

Amendments Nos. 18 to 23 are technical and are intended to clarify the provisions relating to the conditions as to availability for letting and as to occupancy.

Moved, That the House do agree with the Commons in their Amendment No. 5—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

6 Clause 8, page 5, line 7, at end insert— '(3A) In subsection (3) references to letting include the grant of a licence to occupy premises. References in this Chapter to tenants and other expressions relating to tenancies, in the context of a certificate of intended letting, shall be construed accordingly.'.

7 Clause 12, page 8, line 6, at end insert— '( ) The reference in paragraph (f) of subsection (1) to precautions required under or by virtue of an enactment does not include precautions required to comply with a notice under section 352 of the Housing Act 1985 (notice requiring execution of works to render house in multiple occupation fit for number of occupants) so far as it relates to premises which are not part of a house in multiple occupation for the purposes of this Part.'.

8 Clause 14, page 9, line 8, at end insert— 'References in this Chapter to other expressions relating to tenancies, in the context of an application for a common parts grant, shall be construed accordingly.'.

9 Clause 19, page 12, line 7, leave out 'related expressions' and insert 'other expressions relating to tenancies, in the context of an application for disabled facilities grant,'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 6 to 9.

Moved, That the House do agree with the Commons in their Amendments Nos. 6 to 9— (Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

10 Clause 24, page 14, leave out lines 20 to 22 and insert— 'and the authority shall take that into account in deciding whether it is reasonable and practicable to carry out the relevant works.'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 10. It may be convenient if I speak also to Amendments Nos. 59 and 60.

Amendment No. 10 responds to concerns which were expressed in Committee in another place and were also raised by the noble Lord, Lord Williams, during earlier stages in this House. The amendment removes subsection (5) of Clause 24. Subsection (5) provides discretion for an authority on whether or not to approve an application for disabled facilities grant where the building does not meet the requirements of the fitness standard. It is replaced by an obligation on the authority to take into account the matters in subsection (4) in deciding whether it is reasonable and practicable to carry out the relevant works.

As a result of the amendment, disabled facilities grant will remain mandatory whether or not the property is unfit. At the same time the amendment reflects the intention behind the original provision; namely, that local authorities, when considering carrying out the proposed works, should have the discretion to refuse an application where the condition of the property is such that it would be unreasonable and impracticable to carry out the proposed works. The kind of case where that might apply, depending of course on the circumstances, might be where a person was considering installing heavy stairlift equipment when, in fact, the walls were crumbling.

Clause 96 requires local authorities to have regard to guidance which is given under Section 604A of the Housing Act 1985 in deciding whether they are satisfied that carrying out the relevant works with grant aid is the most satisfactory course of action where a property is unfit.

Amendments Nos. 59 and 60 add a requirement for authorities to have regard also to any guidance provided by the Secretary of State under Clause 84 in relation to the use and review of deferred action notices.

Moved, That the House do agree with the Commons in their Amendment No. 10—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

11 Clause 31, page 18, line 14, leave out from first 'be' to 'make' in line 27 and insert 'determined by the local housing authority, having regard to—

1. (a) the extent to which the landlord is able to charge a higher rent for the premises because of the works, and
2. (b) such other matters as the Secretary of State may direct.

( ) The authority may, if they think it appropriate, seek and act upon the advice of rent officers as to any matter. ( ) The Secretary of State may by regulations'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 11.

This amendment provides for authorities, in determining grant applications from landlords, to have regard to the extent to which the landlord is able to generate higher rental income on the improved property and, if they think it appropriate, they can seek and act upon the advice of rent officers on any matters concerning rents.

As Clause 31 provides authorities with discretion to determine the amount of grant which may be given in the case of landlord applications, we consider it important that decisions which are taken by local authorities are based on sound information. It is appropriate therefore that express provision is made to ensure that, in every case, authorities have regard to the scope for charging a higher rent on a property improved with grant. That will have a bearing on the landlord's ability to fund the works and therefore on the amount of grant the authority may award.

The amendment also simplifies Clause 31(4) allowing authorities discretion to obtain and take into account advice from rent officers on any relevant matters.

Moved, That the House do agree with the Commons in their Amendment No. 11—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

12 Clause 34, page 20, line 20, at end insert— '( ) the amount of the costs which have been or are to be incurred as mentioned in subsection (2)(c) has increased,'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 12. In moving this Motion, I shall speak also to Amendments Nos. 13, 28 and 57.

Amendment No. 12 is essentially a technical amendment and completes what would otherwise be an incomplete provision. Clause 34(5) enables authorities to redetermine the estimated expense and amount of grant where they are satisfied that, owing to circumstances beyond the applicant's control, there is a need for additional unforeseen works or if the original estimate cannot be adhered to.

Amendment No. 12 ensures that authorities may also redetermine the estimated expense and amount of grant where the amount of the costs with respect to preliminary or ancillary services or charges has increased owing to circumstances beyond the applicant's control.

Amendments Nos. 13, 28 and 57 correct cross-references in Clauses 35, 54, and 93 of the Bill. Amendment No. 57 is consequential to an earlier amendment made in this House.

Moved, That the House do agree with the Commons in their Amendment No. 12—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

13 Clause 36, page 21, line 2, leave out 'by virtue of section 23(1)' and insert 'under section 24(1)(a)'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 13.

Moved, That the House do agree with the Commons in their Amendment No. 13— (Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

14 Clause 39, page 22, line 1, after second 'grant' insert'—

1. (a) by payment direct to the contractor, or
2. (b)".

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 14. In moving this Motion, I shall speak also to Amendments Nos. 15 and 16.

These amendments respond to concerns expressed in Committee in another place and allow the local authority either to make payments direct to the contractor or to give the applicant a cheque made payable to the contractor. The local authority will be required to inform the applicant that payment will or may be made in this manner.

Moved, That the House do agree with the Commons in their Amendment No. 14—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

15 Clause 39, page 22, line 5, after 'would' insert 'or might'.

16 Page 22, leave out lines 6 to 9.

17 Page 22, line 10, leave out from 'Where' to end of line.

18 Clause 49, page 29, line 24, leave out from 'fulfilled' to end of line 28.

19 Page 29, line 32, leave out from 'dwelling' to end of line 35.

20 Page 29, line 42, at end insert— '( ) The terms of any tenancy of the dwelling (or any part of it, or any property including the dwelling or part of it) shall be deemed to include a duty on the part of the tenant, if required to do so by the owner of the dwelling, to furnish him with such information as he may reasonably require to enable him to comply with a notice under subsection (2).'.

21 Clause 50, page 30, line 13, leave out from 'fulfilled' to end of line 17.

22 Page 30, line 21, leave out from 'house' to end of line 24.

23 Page 30, line 31, at end insert— `( ) The terms of any tenancy of any part of the house shall be deemed to include a duty on the part of the tenant, if required to do so by the owner of the house, to furnish him with such information as he may reasonably require to enable him to comply with a notice under subsection (2).'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 15 to 23.

Moved, That the House do agree with the Commons in their Amendments Nos. 15 to 23—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

24 Clause 51, peave out Clause 51 and insert the following new Clause—

CONDITIONS AS TO REPAYMENT IN CASE OF OTHER COMPENSATION, &C

'.—(1) Where a local housing authority approve an application for a grant they may, with the consent of the Secretary of State, impose a condition requiring the applicant to take reasonable steps to pursue any relevant claim to which this section applies and to repay the grant, so far as appropriate, out of the proceeds of such a claim. (2) The claims to which this section applies are—

1. (a) an insurance claim, or a legal claim against another person, in respect of damage to the premises to which the grant relates, or
2. (b) a legal claim for damages in which the cost of the works to premises to which the grant relates is part of the claim;

and a claim is a relevant claim to the extent that works to make good the damage mentioned in paragraph (a), or the cost of which is claimed as mentioned in paragraph (b), are works to which the grant relates. (3) In the event of a breach of a condition under this section, the applicant shall on demand pay to the local housing authority the amount of the grant so far as relating to any such works, together with compound interest as from such date as may be prescribed by or determined in accordance with the regulations, calculated at such reasonable rate as the authority may determine and with yearly rests. (4) The local housing authority may determine not to make such a demand or to demand a lesser amount.'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 24. In moving this Motion, I shall speak also to Amendments Nos. 25 and 56.

The amendments concern the powers of local housing authorities to impose conditions, with the Secretary of State's consent, requiring applicants to take steps to pursue claims—for example, against an insurance company—covering works for which grant has been paid, and to repay grant as appropriate out of the proceeds of the claim.

Amendment No. 24 inserts a new clause to replace the provisions of Clause 51 of the Bill.

We believe that it is right that where grant has been awarded for works for which a claim against another person or a claim for damages is pending, and which would ultimately meet the cost of the works, the authority should seek recovery of grant already paid. These are sensible provisions which provide authorities with the flexibility to pursue grant recovery in appropriate cases and also help protect grant resources. Amendments No. 25 and 56 are consequential to the new clause.

Moved, That the House do agree with the Commons in their Amendment No. 24—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

25 Clause 52, page 31, line 44, leave out '51' and insert `(Conditions as to repayment in case of other compensation, &c.)'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 25.

Moved, That the House do agree with the Commons in their Amendment No. 25—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

26 Clause 54, page 32, line 19, leave out from first 'of' to end of line 23 and insert 'any such order as is mentioned in subsection (2A);'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 26. In moving this Motion, I shall speak also to Amendments Nos. 27, 29, 30, 110, 113 and 116.

Amendments Nos. 26, 27, 29 and 30 and the new clause which will be introduced by Amendment No. 110 extend the range of exempt disposals where the disposal is as a result of an order made in proceedings relating to divorce, inheritance or children.

The amendments resulted from consideration of provisions in your Lordships' House on the Housing Bill, where the reference was to Section 24 of the Matrimonial Causes Act 1973. This led to a revision of definitions in a number of areas of housing legislation. It is considered appropriate to make similar provision in this Bill.

Amendments Nos. 110, 113 and 116 similarly extend the definitions of exempt disposals under Part VIII of the Local Government and Housing Act 1989, which will continue to apply until the Bill is brought into force.

Moved, That the House do agree with the Commons in their Amendment No. 26—(Earl Ferrers.)

On Question, Motion agreed to.

5.45 p.m.

COMMONS AMENDMENTS

27 Clause 54, page 32, line 24, leave out from 'disposal' to end of line 25 and insert `(see subsection (2B));'.

28 Page 32, line 43, leave out 'section 15' and insert 'section 16'.

29 Page 33, line 19, at end insert— '(2A) The orders referred to in subsection (1)(c) are orders under—

1. (a) section 24 or 24A of the Matrimonial Causes Act 1973 (property adjustment orders or orders for the sale of property in connection with matrimonial proceedings);
2. (b) section 2 of the Inheritance (Provision for Family and Dependants) Act 1975 (orders as to financial provision to be made from estate);
3. (c) section 17 of the Matrimonial and Family Proceedings Act 1984 (property adjustment orders or orders for the sale of property after overseas divorce, &c.); or
4. (d) paragraph 1 of Schedule I to the Children Act 1989 (orders for financial relief against parents).'.

30 Page 33, line 19, at end insert— '(2B) For the purposes of subsection (1)(d) a compulsory disposal is a disposal of property which is acquired compulsorily, or is acquired by a person who has made or would have made, or for whom another person has made or would have made, a compulsory purchase order authorising its compulsory purchase for the purposes for which it is acquired.'.

31 Clause 59, page 36, leave out lines 50 to 52 and insert—

'tenent (and expressios relating to tenancies)
—in the context of a tenant's application for a renovation grant	section 7(6)
—in the context of a certificate of intended letting	section 8(3A)
—in the context of an application for a common parts grant	section 14(2)
—in the context of an application for disabled facilities grant	section 19(5)'

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 27 to 31.

Moved, That the House do agree with the Commons in their Amendments Nos. 27 to 31—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

32 Clause 60, page 37, line 14, after 'works' insert '—(a)'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 32. In moving this Motion, I shall speak also to Amendments Nos. 33 to 36, 41 and 58.

The purpose behind these amendments is to increase the flexibility of group repair. Amendments No. 32 to 35 do so by enabling schemes to deal with structural instability, either together with, or separately from, works to put the property in reasonable repair. The new clause inserted by Amendment No. 41 enables schemes to be varied after commencement with the approval of the Secretary of State. Our intention would be to give a general approval to cover the bulk of cases. Both these sets of amendments meet concerns raised by noble Lords opposite at earlier stages of the Bill.

Amendment No. 36 clarifies the date of scheme approval in cases which fall within the Secretary of State's general consent.

Amendment No. 58 rectifies incorrect references made in Clause 94(4) to Clause 64(2). The particular changes are the insertion of the correct title for Clause 64 and the insertion of a reference to paragraph (b)—of Clause 64(2)—in place of the reference to paragraph (c). The latter takes account of changes that were made to the numbering of Clause 64 following an earlier amendment made at Report stage in this House.

Moved, That the House do agree with the Commons in their Amendment No. 32—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

33 Clause 60, page 37, line 15, at end insert ', or (b) to render the buildings to which the scheme relates structurally stable, or for both those purposes.'.

34 Clause 62, page 37, line 32, at end insert 'works of the following descriptions. ( ) In the case of works to put in reasonable repair the exterior of the buildings to which the scheme relates, the works must be'.

35 Page 37, line 37, at end insert— '( ) In the case of works to render the buildings to which the scheme relates structurally stable, the works must be—

1. (a) works to the structure or to the foundations of the buildings to which the scheme relates, or
2. (b) other works necessary to give satisfactory effect to such works.

and must be such that on completion of the works the buildings will be structurally stable.'.

36 Clause 64, page 38, line 31, at end insert— 'In the case of a scheme not submitted for specific approval, the date of approval shall be taken to be the date on which the authority decide that the scheme fulfils the criteria for general approval.'.

37 Page 39, line 9, at end insert— '(4A) In subsection (4) references to letting include the grant of a licence to occupy premises. References in this Chapter to tenants, and other expressions relating to tenancies, in the context of a certificate of intended letting, shall he construed accordingly.'.

38 Page 39, line 24, at end insert— '( )a health authority, special health authority or NHS trust;'.

39 Page 39, line 24, at end insert— '( ) a police authority established under section 3 of the Police Act 1964;'.

40 Page 39, line 28, at end insert— '( ) An order under subsection (6)(f) may proceed wholly or in part by reference to the provisions relating to entitlement to housing benefit, or any other form of assistance, as they have effect from time to time.'. 41 After Clause 67, insert the following new clause—

VARIATION OF GROUP REPAIR SCHEME

'.—(1) A group repair scheme may be varied at any time before the completion date. The variation may relate to the participants in the scheme, the buildings to which the scheme relates, the scheme works or any other matter. (2) A variation is not effective unless approved by the Secretary of State. The provisions of section 63(2) to (4) (supplementary provisions as to approval of scheme) apply to approval of a variation. (3) Where a scheme is varied to enable other persons to participate, section 64 (persons eligible to participate) applies in relation to new participants with the substitution for the reference to the date of approval of the scheme of a reference to the date of approval of the variation. In the case of a variation not submitted for specific approval, the date of approval shall be taken to be the date on which the authority decide that the variation fulfils the criteria for general approval. (4) Before varying a group repair scheme the local housing authority shall consult the existing participants and consider any representations made by them. (5) Fresh scheme consent is required in the case of an existing participant as to whom the authority are satisfied that his interests are adversely affected by the variation. In any other case the existing scheme consent shall be treated as extended to the scheme as varied.'.

42 Clause 74, page 43, line 44, after 'tenant' insert '(generally)'.

43 Page 43, line 44, at end insert—

'tenant and related expressions (in the context of a certificate of intended letting)

section 64(4A)'

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 33 to 43.

Moved, That the House do agree with the Commons in their Amendments Nos. 33 to 43—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

44 Clause 77, page 45, line 30, leave out from 'has' to 'on' in line 31 and insert 'for that period had its only or main mooring in the same locality'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 44.

This amendment responds to concerns expressed during Committee in another place. It provides that houseboats may satisfy the residency qualification for home repair assistance through being moored in the same locality rather than at the same mooring. The provision as previously drafted unintentionally restricted the mobility of a houseboat in seeking to define the prior qualifying period for grant assistance.

Moved, That the House do agree with the Commons in their Amendment No. 44—(Earl Ferrers.)

Lord Williams of Elvel

My Lords, I am sure that my noble friend Lord Dubs will be very grateful to the Government for producing this amendment. My noble friend has a continued interest in the residency qualification for houseboats. He spoke on that eloquently when the Bill was before your Lordships' House. I am sure that he will be very happy about this provision. I hope that the noble Earl has now had a little rest from jumping up and down, but I am afraid that he will have to jump up and down now.

On Question, Motion agreed to.

COMMONS AMENDMENT

45 Clause 78, page 46, line 21, at end insert— `( ) Regulations under subsection (2) may proceed wholly or in part by reference to the provisions relating to entitlement to housing benefit, or any other form of assistance, as they have effect from time to time.'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 45. Perhaps I should explain to the noble Lord, Lord Williams, that I am not troubled by the exertion of getting up and down but it is rather that the thunder seems to have affected the air-conditioning system.

Moved, That the House do agree with the Commons in their Amendment No. 45—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

46 Clause 81, page 47, line 23, leave out 'owner of that' and insert 'person having control (as defined in section 207 of that Act) of the building or'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 46. At the same time, I should like to speak also to Amendments Nos. 47 to 55.

The purpose behind this group of amendments is fourfold. First, it clarifies the drafting and brings the service of deferred action notices closer into line with the provisions applying to repair notices under the Housing Act 1985 on which they are essentially based. This is the ground covered by Amendments Nos. 46 to 48, the first two and last two lines of Amendment No. 49, and Amendment No. 54. Secondly, it provides that a local authority may serve a copy of a deferred action notice on a licensee, as covered by the wording in paragraph (b) of Amendment No. 49.

Thirdly, Amendments Nos. 50 to 53 provide, in response to arguments made during the Committee stage of the Bill in another place, for the maximum period for reviewing a deferred action notice to be extended from 12 months to two years with the Secretary of State having power to vary the period. Fourthly, Amendment No. 55 corrects a reference error in the index of expressions in Clause 90.

Moved, That the House do agree with the Commons in their Amendment No. 46.—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

47 Clause 81, page 47, line 27, leave out 'The authority may' and insert 'Where the authority serve a notice under subsection (1), (2) or (3) — (a) they shall'.

48 Page 47, line 28, leave out 'dwelling-house or house' and insert 'premises'.

49 Page 47, line 29, at end insert '(within the meaning of Part VI of the Housing Act 1985), and (b) they may serve a copy of the notice on any person having a licence to occupy the premises. ( ) Section 617 of the Housing Act 1985 (service of notices) applies for the purpose of this section as it applies for the purpose of that Act.'.

50 Clause 83, page 48, line 15, leave out 'twelve months' and insert 'two years'.

51 Page 48, line 17, leave out 'twelve months' and insert 'two years'.

52 Page 48, line 17, at end insert— 'The Secretary of State may by order amend this subsection so as to specify such other period or periods as he considers appropriate.'.

53 Page 48, line 18, leave out 'They' and insert 'The authority'.

54 Page 48, line 19, at end insert— 'For this purpose sections 197 (powers of entry) and 198 (penalty for obstruction) of the Housing Act 1985 apply as they apply for the purposes of Part VI of that Act.'.

55 Clause 90, page 52, line 4, leave out '100(b)' and insert '89(b)'.

56 Clause 93, page 53, line 30, after '44(3)(a)' insert ', (Conditions as to repayment in case of other compensation, &c.)'.

57 Page 53, line 31, leave out from 'State)' to end of line 33.

58 Clause 94, page 54, line 10, leave out from `schemes)' to end of line 17 and insert ', in section 64(2) (persons eligible to participate in group repair scheme as assisted participants), the requirement in paragraph (a) that a person give an owner-occupation certificate or a certificate of intended letting does not apply if—

1. (a) the person concerned is a charity or the trustee of a charity, or
2. (b) the dwelling is the residence house of an ecclesiastical benefice;

and the requirement in paragraph (b) that a person give a certificate of future occupation does not apply if the person concerned is a charity or the trustee of a charity.'.

59 Clause 96, page 54, line 38, at end insert 'and section 84 of this Act'.

60 Page 54, line 40, leave out 'that Act' and insert 'the Housing Act 1985'.

61 Clause 100, page 56, line 15, at end insert 'and includes any body established by order under section 88 of the Housing Act 1988'.

62 Page 56, line 17, leave out from first "'introductory' to 'Chapter' in line 18 and insert 'tenancy" and "introductory tenant" have the same meaning as in'.

63 Page 56, line 24, at end insert 'and includes any body established by order under paragraph 7 of Schedule 9 to the New Towns Act 1981'.

64 Page 57, line 4, at end insert 'and includes any body established by order under section 165B of the Local Government, Planning and Land Act 1980'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 47 to 64 en bloc.

Moved, That the House do agree with the Commons in their Amendments Nos. 47 to 64.—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

65 Clause 103, page 57, line 40, leave out from 'agreement' to end of line 41 and insert 'with a person for any of the following—

1. (a) the carrying out of construction operations:
2. (b) arranging for the carrying out of construction operations by others, whether under sub-contract to him or otherwise;
3. (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—

1. (a) to do architectural, design, or surveying work, or
2. (b) to provide advice on building, engineering, interior or exterior decoration or on the laying-out of landscape,

in relation to construction operations. (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.'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 65. At the same time, it may be convenient for the House to consider Amendments Nos. 66, 67, 74, 75, 94 and 111. The main amendment—

Lord Williams of Elvel

My Lords, I am sorry to interrupt the Minister at this point, but does he intend to speak also to Amendment No. 65A?

Lord Lucas

My Lords, I rather feel that I shall have to do so. However, I had intended to wait until the noble Lord, Lord Howie of Troon, moved his amendment. I presume that he will do so immediately after I have spoken. That is still my intention unless the noble Lord, Lord Howie, wishes me to do otherwise.

Lord Howie of Troon

My Lords, I would be much happier if the Minister were to reply to my amendment after I have moved it. However, it usually does not make much difference whether he speaks to my amendments before or after I have moved them.

Lord Lucas

My Lords, the noble Lord, Lord Howie, is as perspicacious as always. As I was saying, the main amendment in the group is Amendment No. 65 which has arisen largely as a result of suggestions by the noble Lord, Lord Howie of Troon, before the Bill left this House. The noble Lord urged us to consider including within the Bill design and other consultancy-type work conducted by non-professionals in support of construction operations. An example might be specialist design work carried out by, say, an electrical contractor prior to wiring a building. The noble Lord pointed out that Clause 104(3) could be taken to relate only to the work of professionals and that a great deal of similar work was carried out on construction sites by those not accredited to a recognised profession. We were sympathetic to this, and I undertook to consider appropriate amendments.

During our deliberations it became clear that we were resting the definition section of Part II of the Bill too firmly on an idea of construction operations, and that that was requiring us to stretch the term to categories of work such as design and consultancy which, although they undoubtedly related to on-site operations, were not in themselves construction operations as generally understood. In short, we decided to redefine a construction contract to include not only construction operations but also work which related to it. That makes it very simple to include non-professional design and consultancy work, as we have done in subsection (1A) of Amendment No. 65, without having to stretch the idea of construction operations even further.

I should point out that Amendment No. 65 also clarifies the position of those who provide labour for construction operations or those involved in management or supervision. They are already covered by Clause 103 as it is drafted, but I hope that the House will agree that subsection (1)(b) and (c) would leave no possibility for doubt about this. We have also thought it right to make it clear, with subsection (1B), that an ordinary contract of employment would not be covered.

Some of the other amendments in the group are consequential. Amendment No. 66 is designed to ensure that there is no doubt about the meaning of "relates to construction operations" in subsection (2). Amendments Nos. 74 and 75 reflect the fact that the inclusion of these operations would be moved from Clause 104 to 103, and Amendment No. 111 is required to set straight the reference to the power to amend these subsections by order.

I turn now to Amendment No. 94. When the Bill was last in this House, the noble Lord, Lord Williams of Elvel, was most tenacious in his pursuit of an amendment to Clause 103 to ensure that construction work on behalf of the Royal Duchies would be covered by fair contracts provisions. Unfortunately, it was impossible to bring forward a government amendment to that effect before the Bill moved to another place, but I did undertake to reflect on the matter. This we have now done, and I am pleased to say that there has been complete agreement that the Bill should apply to work on behalf of the Duchy of Lancaster and the Duchy of Cornwall. That is the purpose of the new clause (Amendment No. 94), and Amendment No. 67 is consequential to it. I hope that the amendments will be acceptable to the whole House and in particular to the noble Lords, Lord Howie of Troon and Lord Williams of Elvel, to whose inspiration we owe such improvements.

Moved, That the House do agree with the Commons in their Amendment No. 65.—(Lord Lucas.)

AMENDMENT TO COMMONS AMENDMENT No. 65

65A Leave out lines 10 to 13 and insert (",in relation to construction operations, to provide professional advice or work on architecture or as a surveyor or consultant on building, engineering, interior or exterior decoration or on the laying-out of landscape").

Lord Howie of Troon

My Lords, I was deeply moved by the Minister's last few words as they contained unusual praise directed towards me. However, I am sorry to say that I am not exactly satisfied with the amendments. Indeed, I am not sure that the Minister correctly represented my objections to the clause as originally set out in the Bill. That was no doubt inadvertent. Perhaps the Minister is confusing me with the noble Lord, Lord Monkswell, who is more interested in non-professional professional work, if I may put it that way, than I am.

If the Minister can recall, my objection was that, in transferring a certain definition from the income tax Bill of 1988, the original Bill had changed the wording of that legislation in a way which I thought was incomprehensible. I know that I am going back quite a while, but perhaps I may remind the Minister of what the Bill originally said. In the reference to "construction operations" it included, the professional work of … architects or surveyors, or … consultants in building, engineering, interior or exterior decoration or in the laying-out of landscape". I was perturbed that a distinction was made in the Bill which was not made in the tax Bill—and, indeed, need not be made in any Bill—between the architects and the consulting engineer.

The Government have changed that part of the definition and shifted it in the Bill in order to meet a real objection. As we know, in Part III the title of architect is protected, but his work is not. In other words, anyone who is not an architect can undertake such work. Indeed, I can and have done so. I dare say that the Minister could do so if he felt so inclined, and it would be covered under the Bill's provisions. There is a good deal of sense in that.

However, I notice that the Government's amendment says: References in this part … include an agreement—

1. (a) to do architectural, design or surveying work, or
2. (b) to provide advice on building, engineering, interior or exterior decoration or on the laying-out of landscape,

"in relation to construction operations". We almost agreed on a previous occasion that the words, in relation to construction operations were in the wrong place; and, indeed, my amendment actually puts them in the right place. But no doubt we shall shortly hear why I am mistaken in that respect. However, in that context, what does the phrase "design work" mean?

The Minister will perhaps not remember, but we had a Bill which went through this House, the name of which escapes me but I am sure the noble Lord, Lord Williams of Elvel, will remember it very well.

5.30 p.m.

Lord Williams of Elvel

My Lords, the copyright Act 1988.

Lord Howie of Troon

My Lords, that is right. During the course of that Bill we had a very substantial discussion about the meaning of "design".

In the context of architectural and design work, design would seem to mean architectural design work. The word "engineering" in the next paragraph does not actually mean engineering design. That eminent body, the Design Council, does not do much in the construction industry. It does a good deal for manufacturing and visual design. I suppose that the Minister will argue that engineering design is included here—and I am sure that I could not convince him that he was wrong—but I should like to see the Bill state that engineering design is included because it is different from architectural design or forms of visual design.

A distinction is made in paragraph (a) to carrying out work and in paragraph (b) to providing advice on building, engineering and one or two other aspects. A consulting engineer is one of the most important people as regards construction contracts in this part of the Bill. He provides not only advice, but he also does substantial work. Other people who provide advice are lawyers. Often it is good advice, but sometimes it is not. The advice which a consulting engineer gives to a client is only a small part of the work that he does. What possible distinction are the Government trying to make between architectural work and engineering advice? Do they understand that there is, in fact, no real distinction between them?

In the construction industry the work of the architect involves feasibility studies, giving advice, drawing up contracts, drawing up specifications, making designs, placing the contract, advising the client on whom to give the contract and then managing, although not always, the work as it progresses as a project manager. The consulting engineer does exactly the same thing. What are the Government trying to do by suggesting that a body of professional activity can be described as architectural work when a similar body of professional activity is described as advice? That does not make much sense. In so far as there is any sense in it, that has been concealed from me, regardless of the amount of interest I have taken in the progress of this Bill.

I could go on a little longer, but I think that that would be extremely unkind. With those few remarks, I beg to move.

Moved, That Amendment No. 65A, as an amendment to Commons Amendment No. 65, be agreed to.—(Lord Howie of Troon.)

Lord Williams of Elvel

My Lords, I thought that the Minister had moved Amendment No. 65. Are we now moving Amendment No. 65A?

Lord Lucas

Yes, my Lords.

Lord Williams of Elvel

My Lords, I am grateful to the Minister for his remarks about the inspiration from me and my noble friend, Lord Howie of Troon, particularly in respect of the Duchy of Cornwall and the Duchy of Lancaster. It seemed to me to be something that was obvious to anybody who read through the Bill, but I am still grateful to the noble Lord.

Lord Lucas

My Lords, Amendment No. 65A seeks to compress subsection (1A) into a single sentence. The noble Lord, Lord Howie of Troon, has shown us on many occasions during the passage of this Bill his ingenuity in suggesting drafting amendments, and we had a similar offering to this during Report. We did not see much need for it then, and we still do not. One of the main purposes of Amendment No. 65 is to make it quite certain that the design and consultancy work of both professionals and non-professionals would be included within the Bill, and this amendment would reinstate the word "professional" in such a way that it is not clear to which items it refers in the list that follows. This would merely cause confusion.

I can, I hope, give the noble Lord, Lord Howie of Troon, the comfort that he requires; that design work in relation to construction operations is covered and that there is no implication in any way in this Bill that we do not honour and love all civil engineers and engineers—indeed, engineers of all descriptions—who might possibly be involved in construction work. In the order of wording or the order of clauses, there is no intention in any way to suggest that they occupy a subsidiary role. Indeed, some of my best friends are engineers.

I do not think that the noble Lord could change anything in this Bill to the advantage of his profession. I do not think that there is anything in this wording which will not cover what they do properly and fully. I appreciate the noble Lord might wish to rephrase it in some way or another. To date the noble Lord has not come forward with the form of wording which convinces us that his is better than ours in this particular aspect.

I can give the noble Lord the comfort which he is seeking underneath; that what this Bill achieves in practice is what he would like to achieve if only he could find the wording to do it in another way.

Lord Howie of Troon

My Lords, it probably will achieve the result in practice because engineers are eminently practical people. Before I finish, I wonder whether the Minister could make some attempt, however feeble, to justify the distinction between work and advice as regards the two bodies of work or advice which are virtually identical.

Lord Lucas

My Lords, my advice is that it works as it is.

Lord Howie of Troon

My Lords, I have spent several months in this Chamber withdrawing amendments and I am happy to withdraw this amendment, too, as is my custom.

Amendment No. 65A, as an amendment to Commons Amendment No 65, by leave, withdrawn.

On Question, Amendment No. 65 agreed to.

COMMONS AMENDMENTS

66 Clause 103, page 57, line 44, at end insert— 'An agreement relates to construction operations so far as it makes provision of any kind within subsection (1) or (1A).'.

67 Page 58, leave out lines 7 to 11.

Lord Lucas

My Lords, I beg to move Amendments Nos. 66 and 67.

Moved, that the House do agree with the Commons in their Amendments Nos. 66 and 67.—(Lord Lucas.)

On Question, Motion agreed to.

COMMONS AMENDMENT

68 Clause 104, page 58, line 14, leave out from beginning to end of line 22 and insert—

1. '(a) construction, alteration, repair, maintenance, extension, demolition or dismantling of buildings or structures forming, or to form, part of the land (whether permanent or not);
2. (b) construction, alteration, repair, maintenance, extension, demolition or dismantling of any works forming, or to form, part of the land, including (without prejudice to the foregoing) walls, roadworks, power-lines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipe-lines, reservoirs, water-mains, wells, sewers, industrial plant and installations for purposes of land drainage, coast protection or defence;'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 68. It may also be convenient to consider Amendments Nos. 69 to 73, 76 and 77, and I understand that the noble Lord, Lord Howie of Troon, will be moving Amendments Nos. 68A, 68B and 68C in this same group.

When we considered these matters at earlier stages of this Bill, I suspect that we spent at least as much time discussing the definition of construction operations as we did any other aspect of the Bill. The Government were grateful for this close and testing scrutiny, and noble Lords accepted a number of detailed amendments which we brought forward as a result.

In examining Amendments Nos. 68 to 73, the House will see a number of familiar issues. I would have hoped that Amendment No. 68 would find favour with the noble Lord, Lord Howie of Troon, who introduced an amendment in Committee which included maintenance as a construction operation. Following debate in another place, we accepted that the industry may find an express reference to maintenance useful in both paragraphs (a) and (b) of this subsection, and we have also taken the opportunity to add a reference to dismantling in paragraph (b).

Although the amendments in the name of the noble Lord, Lord Howie of Troon, show that the noble Lord is still in search of further refinements on this, I hope he may be persuaded that they are unnecessary.

Amendments Nos. 69 and 70 arose as a result of suggestions in another place that external cleaning relating to construction should be treated in the same way as internal cleaning, and that the maintenance and dismantling of scaffolding should be treated in the same way as its erection. I am sure that noble Lords will see the sense of this.

Amendment No. 71 is another old favourite, and arose out of protracted debate here in which the noble Lords, Lord Berkeley, Lord Howie of Troon, Lord Williams of Elvel, Lord Monkswell and my noble friend Lord Ullswater, all made valuable contributions. I doubt if it would be a good use of the House's time to summarise the full extent of that debate, but let me just remind the House that, at the end of our consideration we undertook to amend Clause 104(2)(c) to achieve two particular effects. The first of these was to ensure that the exclusion of work on plant and machinery on a process plant site should extend only to steelwork that was necessarily connected to it in some way, and that all other steelwork on such a site—in common with all other construction work—should be subject to the Bill's provisions. The second was to remove the word "construction" from the beginning of the paragraph and to replace it with something less likely to cause confusion. I hope the House will agree that both those ends have been served by Amendment No. 71.

I hope too that the noble Lord, Lord Williams of Elvel, will recall introducing an amendment in Committee to enable so-called supply-and-fit contracts to be included in their entirety. When the noble Lord, Lord Howie of Troon, introduced a similar amendment at Third Reading, I undertook to bring forward amendments to cover the whole of such contracts, and this would be the effect of Amendment No. 72. I have to say, however, that we have not been prepared to go any further than this, despite the fact that some have argued that so-called "bespoke" manufacture should be covered, even where the manufacturer is not involved in the installation. We continue to believe that it would be difficult to distinguish between products that were fabricated for one particular construction operation and those that were not, and that such a move would be a recipe for dispute and litigation.

As I promised the noble Lord, Lord Howie of Troon, at Third Reading we have brought forward—in Amendment No. 73—an amendment to remove the specific exemption for signwriting and work on signboards and advertisements. I believe the noble Lord, Lord Williams of Elvel, was anxious that we should do that.

Turning now to Amendment No. 76, there are two main changes here, and I will look at the issue most familiar to noble Lords first. Clause 105 excludes from Part II contracts with a residential occupier, and the House will recall that, in Committee, both the noble Lords, Lord Williams of Elvel and Lord Howie of Troon, proposed amendments in the search for the most effective way of achieving this. During the Bill's passage in another place there were still concerns that a client who was building an office block or a factory might include a dwelling so that the whole contract could be exempted from fair contract provisions. Although the Government felt that this was rather unlikely, since the exemption could only apply to an individual owner and not to a company, we were persuaded to bring forward an amendment to make sure that no such loophole existed.

Having looked at this carefully, we decided that the most equitable and generally satisfactory way of proceeding was to restrict the exemption to contracts whose primary purpose related to a dwelling for one of the parties. This would still allow the exemption to cover contracts on second homes, which I know was a concern of the noble Baroness, Lady Hamwee, at Report, and also to cover contracts where some of the work applied to a separate flat, a garage or an outhouse. It would not, however, allow rich individuals to avoid the Bill by adding penthouse flats to their office blocks.

However, the precise wording of Amendment No. 76 has also arisen in response to concerns expressed in the property industry that the Bill might, inadvertently, cover certain types of agreement where construction operations may be identified but where they are incidental to the main purpose. We have listened very carefully to representations in another place on this issue, since we are anxious to ensure that the Bill's payment and adjudication provisions apply only to contracts where it is appropriate for them to do so.

One of the main categories which we would like to exclude is that of agreements to undertake projects under the private finance initiative. I should emphasise, however, that there must be no question of such exemptions having the effect of excluding normal construction work. Anyone with a contract or subcontract for actual construction work on a PH project, or one financed through some sort of loan or finance agreement, should still be covered by the Bill.

Obviously this is a complex and difficult area, and we are not yet in a position to propose firm amendments on this. Although we have only a limited number of exclusions in mind, we are anxious to get them absolutely right. In particular we are keen to avoid any possibility of exempting types of agreements which could be misappropriated for use further down the contractual chain. In other words, we do not want to create loopholes, and need to look at this carefully with representatives of all the interests concerned. Amendment No. 76 would give the Secretary of State power to exclude by order any description of construction agreement, and we intend to use this to bring forward appropriate exclusions along the lines I have indicated. These exclusions would then be debated by both Houses. I am sure that this is the right way forward, and I hope that—with the assurances I have given—noble Lords will feel able to agree to this amendment. Amendment No. 77, reflects the fact that, with Amendment No. 76 in place, there would be two order-making powers in Clause 105. I beg to move.

Moved, That the House do agree with the Commons in their Amendment No. 68.—(Lord Lucas.)

AMENDMENT TO COMMONS AMENDMENT No. 68

68A Line 3, after ("structures") insert ("or any works").

5.45 p.m.

Lord Howie of Troon

My Lords, I beg to move Amendment No. 68A as an amendment to Commons Amendment No. 68. This is almost as small an amendment as I have moved in the course of this Bill. I managed to move one which had only two words in it. However, the Government were worried about the drafting of those two words at the time, but they eventually accepted them.

I think my noble friend Lord Williams of Elvel would agree with me that the Minister listened most carefully to the many amendments which we tabled during the various stages of the Bill. I am not sure that he always got the hang of them but he tried hard to meet us as far as he could. A number of amendments were discussed in the Committee stage in another place. They were sensible amendments and largely based on amendments which we had discussed in this House. They were passed, but unfortunately reversed by the Government at later stages of the Bill. One, however, did get through which sought to include the word "maintenance". That word appeared to give the Government great difficulty, although maintenance contracts are commonplace in construction. As regards roads, part of the private finance initiative is based on people building a road and then maintaining it for about 30 years through a variety of maintenance contracts. I was amazed that the Government took so long to accept the concept of maintenance although they had quite happily accepted the concept of repair. Repair and maintenance are fairly closely related. They do not differ widely from each other. I shall not mention the Minister in another place by name so as not to embarrass him, but he said that maintenance was a jolly silly word to put in the Bill. But then he put it in. That was one of the most sensible things he did.

My point in this little group of amendments is to tighten up the wording of the Bill and to make it understandable to people other than lawyers. Government Amendment No. 68 to Clause 104 contains three lines in paragraph (a) which are almost identical to the first three lines of paragraph (b). However, they are not totally identical; there is a distinction. Paragraph (a) refers to construction, alteration and so on of "buildings or structures". Paragraph (b) refers to the construction, alteration and so on of "any works". The words, any works forming, or to form, part of the land must in any common sense use of language include buildings or structures. Is there some reason why buildings or structures in paragraph (a) should be separated out and distinguished from "any works" in paragraph (b)? Of course there is no reason at all for that. All I have done in my amendment is to combine the two to refer to buildings or structures or any works. I have tidied up paragraph (b) by moving some of the wording into paragraph (a). That is all that I have done. That seems to me to make much more sense than the wording in the Bill as drafted at present, as quite obviously any works must include buildings or structures. If any works exclude buildings or structures someone ought to explain to me why that is so.

In passing let me mention something that occurred to me a few moment ago. I am sorry about that; it would have given me another amendment had I thought of it earlier. In the second to last line of Commons Amendment No. 68 there is a reference to "industrial plant". That means that industrial plant is included in the provisions of the Bill. However, under the exclusions in the Bill there is a reference to process plants. Is "industrial plant" different from "process plant", or will we discover the difference between them in some extremely expensive High Court action? I do not press the point too hard. I merely put the issue forward for the Minister to consider. No doubt we shall have an opportunity to deal with these obscurities and ambiguities when the remainder of the Latham proposals are eventually brought before this House next year or the year after. I beg to move.

Moved, That Amendment No. 68A, as an amendment to Commons Amendment No. 68, be agreed to.—(Lord Howie of Troon.)

Lord Lucas

My Lords, these amendments would have two effects. First, they would reduce the list of examples given in Clause 104 to ones solely concerned with civil engineering projects. I can understand why the noble Lord wishes to achieve that, but this is supposed to be a rather more wide-ranging clause than that.

Secondly, this is another series in the noble Lord's attempts to improve the drafting. We have looked carefully at what the noble Lord proposes. We think that the Bill as drafted achieves the effects we want. We do not see that the noble Lord's amendments offer any practical improvement. With that sparse comfort, I hope that the noble Lord will feel content to withdraw his amendment.

Lord Howie of Troon

My Lords, I am tempted to tell the Minister that he is wrong, but I would not dream of doing so. The amendment does not have the effect that he states. Quite apart from anything else, it leaves the list of examples exactly as he has put it. It so happens that those are nearly all civil engineering matters with the exception of power lines, telecommunication apparatus, and perhaps one or two others. Those are still in the list. His argument is completely mistaken. I give him another chance to convince me that I am wrong.

Lord Lucas

My Lords, with the leave of the House, I think that the best answer to the noble Lord's problems is to rely on Clause 104(4) and the power to make amendments at a later time if the noble Lord proves to be right and there prove to be problems with the definition. Doubtless he will continue to offer his advice to Secretaries of State on this subject. However, there is nothing that we are willing to do at this stage.

Lord Howie of Troon

My Lords, I look forward to Clause 104. I am elated at the thought that the Secretary of State might listen to something said to him. I beg leave to withdraw the amendment.

Amendment No. 68A, as an amendment to Commons Amendment No. 68, by leave, withdrawn.

[Amendments Nos. 68B and 68C, as amendments to Commons Amendment No. 68, not moved.]

On Question, Commons Amendment No. 68 agreed to.

COMMONS AMENDMENTS

69 Clause 104, page 58, line 28, after '(d)' insert 'external or'.

70 Page 58, line 34, at end insert `, maintenance or dismantling'.

71 Page 58, line 45, leave out from `(c)' to 'on' in line 46 and insert 'assembly, installation or demolition of plant or machinery, or erection or demolition of steelwork for the purposes of supporting or providing access to plant or machinery,'.

72 Page 59, leave out lines 4 to 9 and insert— '( ) manufacture or delivery to site of—

1. (i) building or engineering components or equipment,
2. (ii) materials, plant or machinery, or
1340
3. (iii) components for systems of heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply or fire protection, or for security or communications systems,

except under a contract which also provides for their installation;'.

73 Page 59, leave out lines 12 and 13.

74 Page 59, line 14, leave out from beginning to end of line 22.

75 Page 59, line 24, leave out ', (2) or (3)' and insert 'or (2)'.

76 Clause 105, page 59, line 28, leave out from 'apply' to "'dwelling"' in line 32 and insert—

1. (a) to a construction contract with a residential occupier (see below), or
2. (b) to any other description of construction contract excluded from the operation of this Part by order of the Secretary of State.

(2) A construction contract with a residential occupier means a construction contract which principally relates to operations on a dwelling which one of the parties to the contract occupies, or intends to occupy, as his residence. In this subsection'.

77 Page 59, line 39, leave out 'such order' and insert 'order under this section'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 69 to 77 to which I have already spoken.

Moved, That the House do agree with the Commons in their Amendments Nos. 69 to 77.—(Lord Lucas.)

On Question, Motion agreed to.

COMMONS AMENDMENT

78 Clause 106, page 60, line 14, after 'submissions' insert 'in adjudication proceedings, or'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 78. The amendment would permit an exchange of submissions in adjudication proceedings to provide evidence of an agreement in writing in the same way that an exchange of submissions in arbitration and litigation can do so. This was first suggested by the noble Lord, Lord Howie of Troon, in Committee. Indeed, as on every other speaking note today, this demonstrates that we have been listening to the noble Lord. On that occasion I undertook to consider the matter. Unfortunately, we were not able to determine the final form of an amendment before the Bill left this House and in the end it was introduced first in another place. But I am more than happy to give the noble Lord, Lord Howie of Troon, sole credit for this sensible and useful addition to the Bill, and I commend it to the House.

Moved, That the House do agree with the Commons in their Amendment No. 78.—(Lord Lucas.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

79 Clause 107, page 60, line 23, leave out 'resolution by an adjudication' and insert 'adjudication under a'.

80 Clause 107, page 60, line 26, leave out 'procedure must' and insert 'contract shall'.

81 Page 60, line 26, at end insert— `( ) enable a party to give notice at any time of his intention to refer a dispute to adjudication:'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 79 to 81. At the same time it may be convenient to consider Amendments Nos. 82 to 85. Again, I believe that the noble Lord, Lord Howie, has an amendment in this group.

I am sure that I do not need to remind your Lordships that when the Bill was last in this House there was a great deal of debate about the effect which an adjudicator's decision should have. The noble Lords, Lord Williams of Elvel, Lord Howie of Troon, and Lord Berkeley, all spoke to amendments in their name which were designed to ensure that adjudication should produce only a temporary decision, and the noble Baroness, Lady Hamwee, was one who queried our use of the word "resolution" in connnection with adjudication proceedings. As a result of those representations I gave an undertaking at Report that the adjudication under the scheme for construction contracts would enable adjudication decisions to have temporary effect.

By the time the Bill reached another place the Government decided that the meaning of the word "resolution" was insufficiently understood by the industry and we sought to remove it. That is the purpose of Amendment No. 79.

We also brought forward a new subsection to spell out the effect of an adjudicator's decision in much more detail. Our proposal was that an adjudicator's decision should be binding, which we consider essential, but that parties might reopen a dispute if they chose before an arbitrator or the courts. However, mindful not only of the views expressed in another place, but also of the debate that had already taken place in this House, we finally concluded that the industry did not wish to be given the option of permanently binding adjudication. The Government also considered the representations of professionals who feared that rapid but permanent decisions on matters concerning professional competence might have a damaging effect on professional indemnity premiums.

Accordingly I am now asking the House to agree, in Amendment No. 84, a provision which would make an adjudicator's decision binding but temporary. Although we hope that the vast majority of adjudicated decisions will effectively become permanent, we are proposing that this should be possible only with the agreement of parties after the event—or if arbitration or the courts reach the same conclusion.

Amendment No. 80 would substitute the word "contract" for procedure at the head of subsection (2) of Clause 107, and Amendment No. 85 would place all the emphasis on the contract in subsection (4) by omitting the word "procedure".

The noble Lord, Lord Howie of Troon, may recall that, in Committee, he proposed an amendment which would have required the start of the process in which a dispute was referred to an adjudicator to begin with an act of formal notification. Similar suggestions were also made in another place and, although the Government remain doubtful that such a step is really necessary, we have accepted that there are many in the industry who would like to see the process begin formally in that way. We have brought forward therefore Amendments Nos. 81 and 82 which have this effect.

Amendment No. 81 makes it clear that notice may be given at any time. We believe that this is essential if notification is not to provide recalcitrant parties with an opportunity to block the adjudication procedure with artificial and unreasonable constraints. We feel that that is what could happen if Amendment No. 81A, in the name of the noble Lord, Lord Howie of Troon, were to be accepted.

Amendment No. 83 would allow the adjudicator to extend the period for his consideration by up to 14 days with the agreement of the referring party. There were those in another place who advocated that the adjudicator should have sole discretion to extend his consideration indefinitely, but we remain firmly of the opinion that this would be most inadvisable and would inevitably result in adjudication becoming much slower and more expensive than it need be. However, we have accepted that it might be desirable to allow some possibility of an extension in circumstances other than those for which the Bill already allows where parties are agreed that the adjudicator should be given more time. Amendment No. 83 would mean that, where there was a real possibility of a few more days making a difference to a case, the adjudicator would only need to persuade the referring party to allow him more time. Amendment No. 83 would give an extra degree of flexibility to the adjudicator without compromising, to any great extent, our priorities of speed and fairness. We have had to strike a balance, and I believe we have got it about right.

Moved, That the House do agree with the Commons in their Amendments Nos. 79 to 81.—(Lord Lucas.)

AMENDMENT TO COMMONS AMENDMENT No. 81

81A Line 2, after ("time") insert ("within the period prescribed in the contract").

Lord Howie of Troon

My Lords, this is again a small amendment. I should first like to express my thanks to my noble friends and to Baroness Hamwee for the care with which the Government responded to our arguments on the complicated business of adjudication and the distinction between adjudication and arbitration which we tried over and over again to make and which I think the Government eventually got hold of. However, I am not sure that they have quite got hold of the point. I was rather entranced by the remark of the noble Lord the Minister when he said that the adjudication was to be binding but temporary. I know that I am only a Scot and we look at things somewhat differently, but it is hard to see how it can be both binding and temporary. I see the noble Lord, Lord McColl, sitting there. He is a very eminent medical man and he could talk about a binding bandage being temporary. However, this is a different thing altogether. I cannot see that arbitration can be binding if it is temporary. However, I think that the Government means well here. They are trying to do what we want them to do but they cannot bring themselves to say it. They have gone a good way towards the arguments which we put forward and we are grateful to them for that.

Government Amendment No. 81 contains three words which have caused a good deal of concern in the civil engineering profession. It is a provision to enable a party to give notice "at any time" of his intention to refer a dispute to adjudication. In the nature of things, a construction contract is completed over a period of time, sometimes over quite a long period of time, depending on the complications of the project. However, there comes a time when the project is deemed to have been completed. Some sections of the industry are worried that the words "at any time" might mean that the question of arbitration could be raised long after the project had been completed.

My amendment relates to the scheme, which we have not mentioned today, rather than to other contracts, and proposes that the contract should suggest a time limit within which adjudication has to be undertaken. It is a simple issue. Neither contractors nor clients like to think of the spectre of arbitration hanging over their heads for an unspecified period. They believe, rightly or wrongly, that the wording "at any time" raises that spectre.

Moved, That Amendment No. 81A, as an amendment to Commons Amendment No. 81, be agreed to.—(Lord Howie of Troon.)

Viscount Ullswater

My Lords, without Commons Amendment No. 81, I believe that the problem of notification of a reference of a dispute for resolution by adjudication would exercise the writers of contracts to an unreasonable degree. Parties might be tempted to write into the contract something that would seek to undermine the usefulness of this part of the Bill—for example, to the effect that disputes could only be notified within 24 hours of their arising, or only before 9.30 in the morning. This amendment gives the parties a formal starting time for the referral period. I believe that nobody would wish the right to refer to become a source of dispute in itself. I am certain that the scheme for construction contracts should not be used as the first fall-back position for all minor problems with a contract and that this is therefore a sensible amendment.

When your Lordships considered this clause when the Bill was before the House on the previous occasion, the concept that adjudication should be available at any time was, I believe, always implicit. However, it seems that during the passage of the Bill through another place the requirement for adjudication to be available at any time has become explicit.

The concept that there should be a strict time limit upon the referral period is the subject of Amendment No. 81A to Amendment No. 81 proposed by the noble Lord, Lord Howie. I understand that some sections of the industry are concerned about what they see as the widening of the timescale for the opportunity for referral of disputes for adjudication. Sir Michael Latham put forward the concept of adjudication for the quick settling of disputes. He recommended in his report, Constructing the Team, the three basic principles which this section of the Bill follows: first, that there should be no restriction on the issues capable of being referred to the adjudicator, conciliator or mediator, either in the main contract or in sub-contract documentation; secondly, that the award of the adjudicators should be implemented immediately; and, thirdly, that any appeals to arbitration or the courts should be after practical completion and should not be permitted to delay the implementation of awards. I believe that the Government have interpreted those principles in the words of Clause 107 and that the government amendments which my noble friend has put forward complement that position.

I believe that going to arbitration could be much more costly and therefore should not be the first recourse for the parties. The government amendment will not allow a strong party to the contract writing in difficult and onerous conditions which would have the effect of limiting substantially the effectiveness of this section. Therefore, I am content to support the government amendment. I am not content to support the amendment moved by the noble Lord, Lord Howie of Troon.

Lord Lucas

My Lords, I am grateful for my noble friend's support. As he points out, with an amendment such as Amendment No. 81A in place, it will be possible for a party bent on avoiding adjudication to insert a term which would allow notice to be given within an unreasonably narrow window, and we cannot allow that.

I am of course aware that some have doubted the wisdom of allowing parties to refer a dispute to adjudication long after work under the contract has ceased. However, as long as there is any possibility of disputes arising under a contract, parties will have to live with the fact that an adjudicator's decision may be sought. Indeed there may be times, even at such a late stage, where it is desirable to have a quick and cheap procedure that can produce an effective temporary decision, particularly since this will not prevent parties from seeking a permanent decision through arbitration or the courts.

As long as there is a possibility of a dispute arising under a contract, the right to seek adjudication will remain. There is no evidence that this will cause any particular difficulties in practice and on balance we feel that it is likely to be helpful. We should, of course, always be prepared to look again at the legislative framework if persistent problems emerged. Until that stage is reached, I hope the noble Lord, Lord Howie of Troon, will be content to leave the Bill as it is now and to withdraw his Amendment No. 81A.

Lord Howie of Troon

My Lords, in the course of the Bill I have frequently agreed with the noble Viscount, Lord Ullswater. I agreed with his speech today until the end when he disagreed with my amendment, but the rest of his speech was sound. The kind of examples which have been suggested of people inserting unreasonable timetables into a contract do not hold water. No one would accept a contract which contained such unreasonable conditions. Clause 107(2) concerns timetabling and provides that the contract should have a timetable. My amendment proposes the period within which adjudication can be taken in the context of a timetable. The wording of the Government's Amendment No. 81 is "at any time" and it removes adjudication from the context of a timetable.

However, I have been assured by the noble Lord, Lord Lucas, that the Secretary of State will consider our proposals carefully and examine the manner in which the Bill works in practice over the next year or two. If any of the flaws which I have detected are real and not imaginary, he will deal with them. I am therefore happy to withdraw my amendment.

Amendment No. 81 A, as an amendment to Commons Amendment No. 81, by leave, withdrawn.

On Question, Commons Amendments Nos. 79 to 81 agreed to.

6.15 p.m.

COMMONS AMENDMENTS

82 Clause 107. page 60, line 28, at end insert 'of such notice'.

83 Page 60, line 31, at end insert— '( ) allow the adjudicator to extend the period of 28 days by up to 14 days, with the consent of the party by whom the dispute was referred;'.

84 Page 60, line 34, at end insert— '(2A) The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement. The parties may agree to accept the decision of the adjudicator as finally determining the dispute.'.

85 Page 60, line 39, leave out 'provide for a procedure which complies' and insert 'comply'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 82 to 85, to which I have already spoken.

Moved, That the House do agree with the Commons in their Amendments Nos. 82 to 85.—(Lord Lucas.)

On Question, Motion agreed to.

COMMONS AMENDMENT

86 Clause 107, page 60, line 42, leave out from beginning to end of line 2 on page 61 and insert— '( ) For England and Wales, the Scheme may apply the provisions of the Arbitration Act 1996 with such adaptations and modifications as appear to the Minister making the scheme to be appropriate. For Scotland, the Scheme may include provision conferring powers on courts in relation to adjudication and provision relating to the enforcement of the adjudicator's decision.'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 86. At the same time, it may be convenient if we consider Amendments Nos. 93 and 112.

There has been considerable misunderstanding about making the scheme and in particular our reference to the Arbitration Act. Although there may still be some who are suspicious that such a reference could be used to foist arbitration on an unsuspecting industry, I am pleased to say that there is now a general understanding in the industry of the need to mention the Arbitration Act.

We cannot provide adequately for court intervention under an ordinary regulation-making power. Asking the courts to intervene in a way that was outside their normal sphere could only be done through primary legislation or through an adaptation of the Arbitration Act, which contains the right sorts of provision. I need hardly say that it would be quite improper to take a wider power than we think we might need, and we are fortunate in having such a good range of suitable provisions available in such an up-to-date piece of legislation. I beg to move.

Moved, That the House do agree with the Commons in their Amendment No. 86.—(Lord Lucas.)

Lord Howie of Troon

My Lords, in earlier stages of the Bill we had the opportunity to read the draft scheme as it related to England and Wales. There was some discussion in this House and elsewhere about it and I believe that the Government are reconsidering the matter. Is there any possibility of being able to see the scheme applying to Scotland reasonably soon? I have made inquiries but so far they have been fruitless.

Lord Lucas

My Lords, I shall ensure that the noble Lord receives an answer fairly soon but I am afraid that I cannot give him the information he needs now.

On Question, Motion agreed to.

COMMONS AMENDMENT

87 Clause 108, page 61, line 8, leave out '60' and insert '45'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 87. It may also be convenient for us to consider Amendments Nos. 88 and 92, to which I believe the noble Lord, Lord Chapple, has an amendment.

We have always envisaged that the right to interim payments should extend to all construction contracts, provided they were of sufficient duration. The reason for having a time threshold to trigger that right is because we do not think it practicable or reasonable to give that right on shorter contracts. It would clearly make no sense to have compulsory instalments on contracts lasting a day or two. We originally suggested a time threshold of 60 days. However, we have listened carefully to those who argued that this might be too long for small businesses to go without payment and we have accordingly decided to put forward a reduced threshold of 45 days. That is the effect of Amendments Nos. 87 and 88.

The effect of Amendment No. 92 is to remove the word "purporting" from the paragraph which makes contractual pay-when-paid provisions ineffective. We believe that the intention behind the word was not clear to many in the construction industry and accordingly agreed with an amendment made by the Opposition in another place that it should be removed. Provisions should be ineffective if they make payment conditional on the payer receiving payment from a third party. It is as simple as that. I beg to move.

Moved, That the House do agree with the Commons in their Amendment No. 87.—(Lord Lucas.)

On Question, Motion agreed to.

COMMONS AMENDMENT

88 Clause 108, page 61, line 10, leave out '60' and insert '45'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 88.

Moved, That the House do agree with the Commons in their Amendment No. 88—(Lord Lucas.)

On Question, Motion agreed to.

COMMONS AMENDMENT

89 Clause 109, page 61, line 23, at end insert— '(1A) Every construction contract shall provide for the giving of notice by a party not later than five days after the date on which a payment becomes due from him under the contract, or would have become due if—

1. (a) the other party had carried out his obligations under the contract, and
2. (b) no set-off or abatement was permitted by reference to any sum claimed to be due under one or more other contracts.

specifying the amount (if any) of the payment made or proposed to be made, and the basis on which that amount was calculated.'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 89. Amendments Nos. 89 to 91 are complex amendments at the heart of the payment issue. I believe that they offer a most useful and significant improvement to the construction industry's payment mechanisms. When the Bill was in another place, the Government were persuaded that it might be possible to do something further to limit the abuses persistent in the name of set-off and abatement.

We had already done much to this end in the Bill but with Amendment No. 89 we can ensure that a party should know exactly how much he will be paid. The amendment would require a payer to disregard all issues of set-off and abatement in calculating a payment and then to indicate, within five days of the due date of that payment, how much he actually intended to pay. He would need to explain how that amount was calculated and, in doing so, take account of set-off and abatement, regardless of whether they were calculated into the sum due under the contract or simply subtracted afterwards. If he changes his mind he must indicate the change within the time available for issuing or withholding notice. This is the second notice and it is outlined in Clause 110(2). Once the time available for issuing or withholding notice is passed, the payer is bound to hand over the sum indicated. Should he fail to do so by the final date of payment, the payee may take steps to suspend performance, as indicated in Clause 111.

I shall also indicate the purpose of the other amendments in this group. Amendment No. 90 is consequential and Amendment No. 91 is required to make sure that the payer does not need to issue a second notice unless he decides to pay less than he said he would. This is a significant advance and will do much to address a major cause of dispute and disharmony. I beg to move.

Moved, That the House do agree with the Commons in their Amendment No. 89.—(Lord Lucas.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

90 Clause 109, page 61, line 24, after 'provision' insert 'as is mentioned in subsection (1) or (1A)'.

91 Clause 110, page 61, line 28, at end insert— 'The notice mentioned in section 109(1A) may suffice as a notice of intention to withhold payment if it complies with the requirements of this section.'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 90 and 91, to which I have already spoken.

Moved, That the House do agree with the Commons in their Amendments Nos. 90 and 91.—(Lord Lucas.)

On Question, Motion agreed to.

COMMONS AMENDMENT

92 Clause 112, page 62, line 23, leave out 'purporting to make' and insert 'making'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 92.

Moved, That the House do agree with the Commons in their Amendment No. 92.—(Lord Lucas.)

AMENDMENT TO COMMONS AMENDMENT No. 92

92A Line 1, after ("insert") insert ("'which has the effect of'").

Lord Chapple

My Lords, I beg to move Amendment No. 92A as an amendment to Commons Amendment No. 92.

The issue of pay-when-paid is fairly important, but is not very clearly understood owing to the fact that many mumbled words have been uttered. What does the phrase mean? It means that if you work for a client who works for a client, and he is not paid or payment is delayed, he passes the cost on to you. That causes a great many bankruptcies in small and medium-sized firms in the building industry. Admittedly, in the rest of the Bill before the House the Government attempt to remedy that problem; in other words, to put a stop to what amounts to the blackmail of such companies.

Had the original wording remained, I should have been satisfied and should not have moved an amendment. With these five words, I seek to restore to the Bill the original meaning. I hope the Government will think again about pursuing this course. I beg to move.

Moved, That Amendment No. 92A, as an amendment to Commons Amendment No. 92, be agreed to.— (Lord Chapple.)

Viscount Ullswater

My Lords, Commons Amendment No. 92 narrows the prohibition of conditional payment provisions to the making of straight pay-when-paid contract conditions ineffective. I understand that there was considerable discussion about this in the other place, especially when the Latham Report, in Recommendation 8.10, uses these words: any attempt by a contractor to include a clause in a bespoke contract form with the effect of introducing "pay-when-paid" conditions should be explicitly declared unfair and invalid". That is virtually the text of the amendment now moved by the noble Lord, Lord Chapple. I am glad that the other place had difficulty with "purporting to", because I found that equally difficult to interpret.

Payment under a construction contract is always going to be conditional on something. In most instances the work has to be certified by somebody before a payment can be made. What the Bill addresses is the practice of a main contractor claiming that it is able to withhold payment because it has not been paid as a result of the certificate, or not paid enough. However, Clause 112 is still only part of the matter. The parties to a construction contract must, under Clause 109 of the Bill, provide an adequate mechanism for determining what payments become due under the contract, and when; that is, payers must explain the timing and the amounts of the sums due. That may still include the event of a certificate being issued, but it must no longer rest upon the handing over of a sum of money further up the line.

I have been advised, like the noble Lord, Lord Chapple, that some parts of the construction industry are unhappy about the narrowing of the contract conditions to merely "pay-when-paid", and would certainly want to see more conditional payment terms being made ineffective. They are unhappy that the "adequate mechanism" will not be sufficiently strong to take up the recommendation in Latham that I quoted. This gives a wider interpretation to conditional payment provisions than the words in the Bill as originally drafted. As I have said before, the scheme for construction contracts cannot or should not be the first fallback position for any weakness in a construction contract; but it will be very important for the department to get the scheme right so that it can support the industry in a sensible way. There is now the new opportunity offered by the legislation to call in the adjudicator if there is a dispute.

Having said that, I wish to ask my noble friend Lord Lucas whether he understands that there is still a worry among the subcontractors and specialists in the industry that the sensible provisions in the Bill will and can be circumvented. If that is the case, could my noble friend give some comfort to those in the industry who are still worried by saying that if time proves that these concerns are justified, the Government will undertake to have another look at these conditional payment provisions? I believe that all noble Lords would want to see these sensible provisions work effectively. Therefore I am, perhaps reluctantly, prepared to support the government amendment, and to reject the amendment of the noble Lord, Lord Chapple.

Lord Howie of Troon

My Lords, a week or so ago I attended a dinner where a Government Minister, Mr. Roger Freeman, said that this Bill will introduce a statutory right of payment by instalments and a specified final date for payment for all construction contracts and outlaw the practice of pay-when-paid. His remarks were important. He presumably believed that the Bill outlawed the practice of pay-when-paid. I imagine that in drawing up their amendments in the other place the Government believed that they outlawed that practice. However, nobody else believes that. The Bill as it stands, with the proposed Commons amendments, does not outlaw the practice, regardless of what the Minister might say.

I give the Government credit for moving a long way in the right direction. However, for them to accept the amendment moved by the noble Lord, Lord Chapple, would be to move further in the right direction, and that would be very welcome.

Lord Lucas

My Lords, the noble Lord, Lord Chapple, has pressed us to reconsider an amendment to prohibit contractual conditions with the effect of pay-when-paid. We believe this is unnecessary, since we have banned pay-when-paid clauses, as we set out to do, and that to go any further would leave a degree of uncertainty in the effect of these provisions. If a provision in a contract has the effect of pay-when-paid, it is a matter of pay-when-paid. We do not see that the words in the amendment will add anything to the effectiveness of the Bill. They will merely cause confusion.

We have heard something about the apparent intention of the Latham Report on this matter. The concern that Sir Michael was asked to address was that the payment chain was becoming so extended that small construction companies at the bottom of the chain were having to wait months for their money. That was because of the pay-when-paid system, whereby payments made by a main contractor would await payment to them by the client. We believe that that is a well-understood concept and that the wording in this part of the Bill is sufficient to deal with it particularly when backed up, as my noble friend Lord Ullswater said, with requirements elsewhere in the Bill for an adequate payment mechanism.

Clearly, as time goes on, we shall be able to monitor the success of this legislation. In an industry where contracts are frequently very long, it might take us quite a while to be sure whether or not we have got matters right. If events show that we have missed the mark in significant ways, we will revisit the issue of fair contracts legislation and make the appropriate changes.

However, legislation should not be seen as an end in itself. The Bill is meant only to be a stepping-stone in the drive to build better relationships within the construction industry and to work towards the wider aims outlined by Sir Michael Latham in Constructing the Team.

I hope that in that context and with those assurances the noble Lord will feel able to withdraw his amendment.

Lord Chapple

My Lords, I beg leave to withdraw my amendment.

Amendment No. 92A, as an amendment to Commons Amendment No. 92, by leave, withdrawn.

On Question, Motion agreed to.

6.30 p.m.

COMMONS AMENDMENTS

93 Clause 113, page 63, line 22, at end insert— '(5) Regulations under this section shall not be made unless a draft of them has been approved by resolution of each House of Parliament.'.

94 After Clause 115, insert the following new clause—

CROWN APPLICATION

'.—(1) This Part applies to a construction contract entered into by or on behalf of the Crown otherwise than by or on behalf of Her Majesty in her private capacity. (2) This Part applies to a construction contract entered into on behalf of the Duchy of Cornwall notwithstanding any Crown interest. (3) Where a construction contract is entered into by or on behalf of Her Majesty in right of the Duchy of Lancaster, Her Majesty shall be represented, for the purposes of any adjudication or other proceedings arising out of the contract by virtue of this Part, by the Chancellor of the Duchy or such person as he may appoint. (4) Where a construction contract is entered into on behalf of the Duchy of Cornwall, the Duke of Cornwall or the possessor for the time being of the Duchy shall be represented, for the purposes of any adjudication or other proceedings arising out of the contract by virtue of this Part, by such person as he may appoint.'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 93 and 94, to which I have already spoken.

Moved, That the House do agree with the Commons in their Amendments Nos. 93 and 94.—(Lord Lucas)

On Question, Motion agreed to.

COMMONS AMENDMENT

95 Clause 118, page 66, line 16, leave out 'such' and insert 'the bodies representative of architects which are incorporated by royal charter and such other'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 95. It may be convenient at the same time if we consider Amendments Nos. 96 to 104, Amendments Nos. 126 to 128 and Amendments Nos. 130 to 132. Amendment No. 95 would add the specific requirement for the new Architects Registration Board to consult bodies of chartered architects—and this means the Royal Institute of British Architects and its equivalents in Scotland and Northern Ireland—before prescribing qualifications and experience needed for entry to the register of architects. The Bill as drafted already implies this. It requires the board to consult such professional and educational bodies as it thinks appropriate. Our view is that it would be unreasonable for the board to fail to consult the chartered bodies including the RIBA, which is the professional organisation to which 70 per cent. of architects belong. Clearly, it would be right for it to consult the bodies that it thought appropriate in respect of the remaining 30 per cent. of architects.

Nevertheless, this amendment aims to reassure the RIBA that it will continue to have a major input in the setting of prescribed qualifications by putting on the face of the Bill the requirement to consult it. We recognise that the RIBA plays a predominant role in architectural education and we do not wish the board to duplicate that role. But, at the same time, we must preserve the right of the board to determine the qualifications and experience necessary for registration as an architect. We believe that Amendment No. 95 strikes the right balance between recognising the RIBA's role and ensuring that the board can carry out its duties properly.

I turn to Amendments Nos. 96 to 103 and Amendment No. 128. Clause 119 creates the new disciplinary offence of professional incompetence and replaces the existing offence of disgraceful conduct with unacceptable professional conduct. It increases the level of protection given to the public by making bad work as well as bad behaviour a disciplinary offence. These amendments add the word "serious" before "professional incompetence". We have accepted the concerns of the profession that otherwise we may face the risk, albeit a small one, of trivial or vexatious allegations being made.

Amendment No. 104 and Amendments Nos. 130 to 132 bring the maximum penalty for practising under the title "architect", while not registered applicable in Northern Ireland, into line with that for the rest of the United Kingdom; namely, level 4 on the standard scale. Amendments Nos. 126 and 127 remove uncertainty and bring the drafting up to date. They have no other effect. I beg to move.

Moved, That the House do agree with the Commons in their Amendment No. 95.

On Question, Motion agreed to.

COMMONS AMENDMENTS

96 Clause 119, page 68, line 6, after `(b)' insert 'serious'.

97 Page 68, line 17, after 'or' insert 'serious'.

98 Page 68, line 20, after 'or' insert 'serious'.

99 Page 68, line 33, at end insert 'serious'.

100 Page 68, line 41, at end insert 'serious'.

101 Page 69, line 12, after 'or' insert 'serious'.

102 Page 69, line 20, at end insert 'serious'.

103 Clause 120, page 70, line 44, after 'or' insert 'serious'.

104 Clause 121, page 71, line 16, leave out from 'registered); to end of line 17 and insert 'for the words from "to a fine" to "therefor:" substitute "to a fine not exceeding level 4 on the standard scale:".'.

Lord Lucas

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 96 to 104, to which I have already spoken.

Moved, That the House do agree with the Commons in their Amendments Nos. 96 to 104 —(Lord Lucas.)

On Question, Motion agreed to.

COMMONS AMENDMENT

105 After Clause 127, insert the following new clause—

REGENERATION AND DEVELOPMENT: WELSH DEVELOPMENT AGENCY

'.—(1) In the Welsh Development Agency Act 1975, after section 10 insert

"Financial assistance for regeneration and development.

10A.—(1) The Secretary of State may appoint the Agency to act as his agent in connection with such of his functions mentioned in subsection (2) below as he may specify. (2) The functions are—

1. (a) functions under sections 126 to 128 of the Housing Grants, Construction and Regeneration Act 1996 (financial assistance for regeneration and development), so far as they relate to—
1. (i) financial assistance which the Agency has power to give apart from this section; or
2. (ii) financial assistance given under that Act in pursuance of an agreement entered into by the Secretary of State for Wales before the coming into force of this section, or
2. (b) functions of the Secretary of State in relation to financial assistance given by the Secretary of State for Wales under sections 27 to 29 of the Housing and Planning Act 1986.

(3) An appointment under this section shall be on such terms as the Secretary of State, with the approval of the Treasury, may specify; and the Agency shall act under the appointment in accordance with those terms. (4) The Agency's powers in relation to functions under an appointment under this section include the powers it has in relation to functions under subsection (3) of section 1 by virtue of subsections (6) and (7) of that section. (2) In section 2(8) of that Act, after "declared that" insert ", except as provided by section 10A below,".'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 105. I should like to speak at the same time to Amendment No. 115. Amendment No. 105 inserts a new clause after Clause 127 in Part IV of the Bill. It allows the Secretary of State for Wales to appoint the Welsh Development Agency to act as his agent in Wales, first, on regeneration and development issues— where these functions fall within the Welsh Development Agency's powers— and, secondly, on the administration of urban investment grant agreements. This mirrors the powers which the Secretary of State for the Environment has already used to appoint English Partnerships as his agent for regeneration in England. Amendment No. 115 is consequential and will bring the new clause into force the usual two months after Royal Assent.

Moved, That the House do agree with the Commons in their Amendment No. 105.—(Earl Ferrers.)

Lord Williams of Elvel

My Lords, we have no disagreement with the Commons amendment. I should like to make one small point that I hope the Minister will bring to the attention of his right honourable friend the Secretary of State for Wales. I must report that the Welsh Development Agency does not have a very good record for paying its bills. Having said that, I very much hope that the noble Earl will pass on that remark to his right honourable friend. On numerous occasions in Wales the WDA has not paid its bills on time. I hope that that will cease as of now.

Earl Ferrers

My Lords, if the Welsh Development Agency reads Hansard the practice will probably cease. I will ensure that the observations of the noble Lord are passed on to the appropriate quarter.

On Question, Motion agreed to.

COMMONS AMENDMENT

106 Clause 129, page 74, line 21, at end insert— `and regulations made under paragraph (c) may provide for particular questions arising under the regulations to be determined by the authority.'

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 106. I should like to speak also to Amendments Nos. 107 to 109. The purpose behind these minor amendments is to increase the flexibility of the relocation grant provisions and to bring them more into line with the provisions for renovation grants.

Moved, That the House do agree with the Commons in their Amendment No. 106.—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

107 Clause 131, page 76, line 13, leave out 'in the same area a dwelling of the same type' and insert 'a comparable dwelling in the same area'.

108 Page 76, line 33, at end insert— '(8A) Regulations may make provision requiring any information or evidence needed for the determination of any matter under this section to be furnished by such person as may be prescribed.'

109 Clause 132, page 77, line 13, at end insert— '( ) The consent of the Secretary of State for the purposes of subsection (3)(b) may be given either generally or in relation to any one or more specified authorities or descriptions of authority or in relation to particular cases or descriptions of case.'

110 Before Clause 138, insert the following new clause—

EXISTING HOUSING GRANTS: MEANING OF EXEMPT DISPOSAL

'.—(1) Section 124 of the Local Government and Housing Act 1989 (relevant and exempt disposals for purposes of housing grants) is amended as follows. (2) In subsection (3) (exempt disposals), for paragraph (c) substitute— (c) a disposal of the whole of the dwelling in pursuance of any such order as is mentioned in subsection (4A) below;". (3) After subsection (4) insert— (4A) The orders referred to in subsection (3)(c) above are orders under

1. (a) section 24 or 24A of the Matrimonial Causes Act 1973 (property adjustment orders or orders for the sale of property in connection with matrimonial proceedings),
2. (b) section 2 of the Inheritance (Provision for Family and Dependants) Act 1975 (orders as to financial provision to be made from estate).
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3. (c) section 17 of the Matrimonial and Family Proceedings Act 1984 (property adjustment orders or orders for the sale of property after overseas divorce, &c.), or
4. (d) paragraph 1 of Schedule 1 to the Children Act 1989 (orders for financial relief against parents);".'.

111 Clause 142, page 83, line 3, at end insert '103(IC),'.

112 Page 83, line 4, leave out 'and 105(4)' and insert', 105(4) and 113(5)'.

113 Clause 144, page 83, line 19, after 'sections' insert '(Existing housing grants: meaning of exempt disposal),'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 107 to 113.

Moved, That the House do agree with the Commons in their Amendments Nos. 107 to 113.—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENT

114 Clause 146, page 83, leave out lines 41 and 42 and insert— '(1) The following provisions of this Act come into force on Royal Assent—

1. (a) section 142 (orders, regulations and directions),
2. (b) sections 144 to 147 (extent, commencement and other general provisions).'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 114. At the same time, I should like to speak to Amendments Nos. 117 to 125 and Amendment No. 129. Amendments Nos. 114 and 117 correct a drafting oversight. They provide for the powers in Clause 142, which enable different provisions to be made in different cases for the orders, regulations or directions to be brought into force, as is becoming usual practice, on Royal Assent. Amendment No. 118 removes the words which your Lordships inserted in the normal way at Third Reading to avoid questions of financial privilege. The other amendments adjust certain consequential amendments in Schedule 1 and one of the repeals in Schedule 3 relating to Part I of the Bill.

Moved, That the House do agree with the Commons in their Amendment No. 114.—(Earl Ferrers.)

On Question, Motion agreed to.

COMMONS AMENDMENTS

115 Clause 146, page 84, line 3, leave out '127' and insert '(Regeneration and development: Welsh Development Agency)'.

116 Page 84, line 4, at end insert— 'section (Existing housing grants: meaning of exempt disposal) (existing housing grants: meaning of exempt disposal),'.

117 Page 84, leave out lines 7 and 8

118 Clause 147, page 84, leave out lines 19 to 22.

119 Schedule 1, page 85, line 19, after 'substitute' insert 'section 523 of the Housing Act 1985 (assistance for provision of separate service pipe for water supply) or'.

120 Page 85, line 23, after 'substitute' insert 'section 523 of the Housing Act 1985 (assistance for provision of separate service pipe for water supply) or'.

121 Page 86, leave out lines 14 and 15 and insert 'In section 535(1)(a) of the Housing Act 1985 (exclusion of assistance under Part XV of that Act where grant application pending or approved), for the words from "an improvement grant" to "Part XV" substitute'.

122 Page 86, line 26, after 'substitute' insert 'section 523 of the Housing Act 1985 (assistance for provision of separate service pipe for water supply) or'.

123 Page 86, line 39, after 'substitute' insert 'section 523 of the Housing Act 1985 (assistance for provision of separate service pipe for water supply) or'.

124 Page 86, line 43, leave out from 'subsection' to 'of' and insert '(5b) for "Part VIII of the Local Government and Housing Act 1989" substitute "Chapter II'.

125 Page 87, line 12, leave out from 'substitute' to end of line 13 and insert 'or under section 12 or 27 of the Housing Grants, Construction and Regeneration Act 1996 (renovation grants or HMO grants: purposes)".'.

126 Schedule 2, page 91, line 47, leave out 'from "by the removal" to "against the removal or determination,"' and insert "'by the removal" onwards'.

127 Page 92, line 9, at end insert; and on an appeal under this section the Court may make any order which appears appropriate, and no appeal shall lie from any decision of the Court on such an appeal.".'.

128 Page 94, line 48, after 'or' insert 'serious'.

129 Schedule 3, page 96, line 25, after '30' insert ', the words "The Local Government and Housing Act 1989 section 138(1)".'.

130 Page 97, line 12, column 3, leave out 'the words from "and to" to "therefor" and'.

131 Page 97, line 18, at end insert—

'1977 c. 45.

Criminal Law Act 1977.

In Schedule 6, the entry relating to the Architects Registration Act 1938.'.

132 Page 97, line 21, at end insert—

'1995 c. 40.

Criminal Procedure(Consequential Provisions) (Scotland) Act 1995.

In Schedule 2. in Part II, the entry relating to the Architects Registration Act 1938.'.

Earl Ferrers

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 115 to 132 en bloc.

Moved, That the House do agree with the Commons in their Amendments Nos. 115 to 132.

On Question, Motion agreed to.