§ 4 Clause 11. page 5, line 23, leave out from beginning of line to end of line 29 and insert—
§ (".—(1) A qualifying debt created by virtue of an obligation to make an advance payment shall be treated for the purposes of this Act as if it was created on the day mentioned in subsection (3), (4) or (5) (as the case may be).
§ (2) In this section "advance payment" means a payment falling due before the obligation of the supplier to which the whole contract price relates ("the supplier's obligation") is performed, other than a payment of a part of the contract price that is due in respect of any part performance of that obligation and payable on or after the day on which that part performance is completed.")
§ Lord Clinton-Davis
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 4. I shall speak also to Amendment No. 5. This is a technical amendment.
Following the Committee stage in the other place, we reviewed the Bill to ensure that none of the amendments made during the passage of the Bill had inadvertently caused things to fall outside the Bill which should be covered. This amendment picks up the one issue that we identified. The purpose of the amendment is to ensure that the Bill operates on stage payments; that is, interim payments in respect of work actually done.
During discussion in the Moses Room, the Government brought forward an amendment to clarify the operation of Clause 4 on the period for which statutory interest runs. Inadvertently, however, the amendment put stage payments into a state of limbo as they are caught by the definition of an advance payment in Clause 11, but the clause does not stipulate from when interest will run.
Rather than invent a "rule" in Clause 11 for genuine stage payments, we feel that the best approach is to take them out of Clause 11 altogether. That is achieved through Amendment No. 4. The effect of the amendment is that stage payments, where the payments are for work already done, are dealt with under Clause 4(3) and (5) as appropriate.
Amendment No. 5 is consequential to Amendment No. 4. The new wording for Clause 11 requires a change in the word structure in Clause 11(4). It also serves to 1012 remove an element of ambiguity as the obligation to pay the price is, in one sense, always present in a supply contract. I beg to move.
§ Moved, That the House do agree with the Commons in their Amendment No. 4.—(Lord Clinton-Davis.)
The Earl of Home
My Lords, as the Minister said, this clause has been rather chopped and changed in the course of attempting to get it right. An amendment as important as this shows that despite the claims that they consulted widely on producing the Bill, the Government did not understand the implications. The alternative is that the Government are playing fast and loose with Parliament. Had I thought the latter, I would have created more fuss. However, the Minister was kind enough to write to me explaining the reason for the amendment. As he said, the previous amendment inadvertently put stage payments into a state of limbo.
I am sure that what the Minister said to the House was said in good faith and I accept it in good faith. We shall watch carefully to see how this and the other clauses work in practice and will no doubt return to the matter in due course. In the meantime, we will not oppose the amendment from these Benches.
§ Lord Clinton-Davis
My Lords, I thank noble Lords for their constructive comments. The Government did understand the implications; they simply got the wording wrong.
§ On Question, Motion agreed to.