Construction Industry (Sub-contracting) (Hansard, 15 July 1975)

§ Mr. John Silkin

Since my right hon. Friend's announcement on 15th January of the Government's intention to introduce a measure on the lines of the Construction Industry Contracts Bill 1970 as soon as possible, further detailed study has revealed that the scheme would involve very substantial overlap with the revised Inland Revenue tax deduction scheme set out in the Finance (No. 2) Bill now before this House. I do not therefore propose to bring forward further separate legislation for the time being. Instead, we shall concentrate our attack on the abuses of the "lump" through the Finance Bill measures which are due to come into operation early next summer. Accordingly, my right hon. Friend the Chancellor of the Exchequer has tabled an amendment to the Finance Bill to add the possession of adequate public liability insurance to the other conditions for obtaining a sub-contractor's tax certificate. The question of introducing a levy will be considered after a year's experience of the working of the revised Inland Revenue scheme. I judge that in addition to recovering tax and national insurance which would otherwise be lost, the more stringent conditions to be imposed on holders of Inland Revenue subcontractors' tax certificates, together with the increase in the deduction rate to 35 per cent. from September, will, in the present state of the industry, have the effect of substantially reducing the number of those operating on the "lump". At the same time, I am anxious that the Government should have the benefit of regular advice from the industry394W about the effect of Government measures on the lump and about other measures which would increase stability of employment in the industry. I am, therefore, intending to establish in the very near future an advisory Construction Industry Manpower Board with appropriate terms of reference and composed of representatives of both sides of the industry together with an independent chairman.