New Clause 21
Local Democracy, Economic Development and Construction Bill [Lords]
3:30 pm

Dan Rogerson (North Cornwall, Liberal Democrat)

I beg to move, That the clause be read a Second time.

Again, I shall not detain the Committee for too long. The hon. Member for Peterborough raised the issues covered by new clause 22, which would protect those at the end of the chain who carry out work on a construction project. It would try to prevent contractors higher up the money-supply chain from withholding payment because of an insolvency somewhere along that chain—in particular, at the top of it. As he has raised this issue already, I shall merely say that that problem remains to be resolved.

Sarah McCarthy-Fry (Parliamentary Under-Secretary, Department for Communities and Local Government; Portsmouth North, Labour)

We return to the point raised by the hon. Member for Peterborough. The new clause would protect firms from the effects of insolvency elsewhere in the supply chain, which is, of course, a laudable aim. However, we must ensure that, when trying to protect some businesses, we do not disadvantage others. That would be the case in the construction industry as in any other. Of course, the construction industry is facing difficulties in the economic downturn, but so are other sectors.

The new clause suggests that we delete the insolvency exception to the prohibition of the “pay when paid” clauses. The construction industry is unique in that such clauses are prohibited by statute, and that exception is in place for a good reason. It continues to allow construction firms the same protection from the risks of an insolvency as businesses in other industries. It is important to maintain that level playing field. We need to be careful that we do not create a situation for construction insolvencies different from that for other businesses. Preventing construction firms from using “pay when paid” clauses in insolvency situations would do that.

We have consulted the industry extensively on whether a better solution could be found than the compromise one in the Housing Grants, Construction and Regeneration Act 1996—a solution that would deliver a fairer result for all—but no clear evidence was found that the removal of the current insolvency exception would achieve that. In those circumstances, the sensible option is to maintain the status quo. I therefore ask the hon. Gentleman to withdraw his new clause.

Dan Rogerson (North Cornwall, Liberal Democrat)

I merely note that the type of people at the end of the chain—the smaller contractors—are probably more exposed and at risk than some of the larger businesses higher up. That is the potential problem. Larger businesses may well be able to look at the finances and absorb costs in a different way from some of the small contractors at the bottom of the chain. For that reason, they deserve a little more protection than they are currently afforded, so I shall press the clause to a vote.

Rosie Winterton (Minister of State (Yorkshire and the Humber), Department for Communities and Local Government; Doncaster Central, Labour)

May I take this opportunity, Mr. Illsley, to thank you and Mr. Amess for conducting proceedings in Committee with firmness but fairness and allowing a wide-ranging and probing debate. I also thank the Clerk of the Committee, the Hansard reporters, the policemen, the attendants and those who have witnessed our proceedings—on some occasions, I know, spellbound by the quality of the debate. I also thank my officials from the Department for doing an excellent job in briefing two fairly new Ministers and, I hope, in being helpful to other Committee members where necessary.

I thank all members of the Committee, but particularly the Government Whip, who has done an excellent job keeping us in order, and my hon. Friend the Exchequer Secretary, who has stayed with us right until the end. I want to say what a pleasure it has been working with her—albeit for a rather shorter time than we perhaps had in mind last week. There has been a great deal of expertise on the Committee. We have been lucky to have a number of right hon. and hon. Members who have either direct local government experience or experience as Local Government Ministers. That has helped us to give proper scrutiny to the Bill.

As well as thanking Labour Members, I want to thank the Opposition Front Benchers for their probing amendments and debate. In the end, we have a very good Bill that will empower people to shape their local communities, help local and regional economies through the immediate difficulties and create robust local, regional and national economies for the future. Thank you, Mr. Illsley. I support the proposal to report the Bill to the House.

Paul Goodman (Shadow Minister, Communities and Local Government; Wycombe, Conservative)

It would be wrong of the official Opposition not to thank you, Mr. Illsley, and Mr. Amess for the way in which you have chaired proceedings. We hope that you have enjoyed them as much as the rest of us. It has been a somewhat uncertain process: we have not always been certain at what time we will start on Tuesday mornings; we have not always been certain whether Ministers and Government Members would be able to make use of the lift, but they have somehow managed; and we have not always been certain which Minister we would find here.

The new Exchequer Secretary must wake up each morning wondering which Ministry she is in. The logical destination for her is the Foreign Office, so that she can wake up wondering which country she is in—like some former American Presidents. I thank the Minister for Regional Economic Development and Co-ordination for the way in which she has conducted herself during the proceedings. She has felt her way into the Bill. We obviously do not think as much of it as she does, and we will return to that theme on Report.

We have enjoyed the contributions from the Liberal Democrats, with whom we found we agreed on many occasions, although not always. We thank the police and other attendants.

I close by thanking those two stalwarts of the Committee, my right hon. Friend the Member for Skipton and Ripon and the right hon. Member for Greenwich and Woolwich.

David Curry (Skipton and Ripon, Conservative)

The mastodons done good!

Paul Goodman (Shadow Minister, Communities and Local Government; Wycombe, Conservative)

It has been an education and a pleasure listening to the mastodons on occasion. Without meaning to be impertinent, but perhaps being a little less serious, if I were to wake up in the morning and find myself reading in the public print that the two intended to contract a civil partnership, I would not be altogether surprised, although I would be surprised not to have received an invitation.

Julia Goldsworthy (Falmouth and Camborne, Liberal Democrat)

It has been a pleasure to serve under your chairmanship, Mr. Illsley, and that of Mr. Amess.

On behalf of myself and my hon. Friend the Member for North Cornwall, I thank the Ministers for taking on the brief so quickly and for handing it on in the process of debating the Bill. I wonder whether there will be any changes in the Ministers on Report. Who knows? I thank the officials for giving the Ministers such inspiration so rapidly and for responding to many of the queries that we raised.

We pay tribute to the other hon. Members to whom we have had the opportunity to listen. The hon. Member for Wycombe said that we agreed in most part. However,  at no point did my hon. Friend the Member for North Cornwall or I feel the need to confess to or suppress any Stalinist urges. We would perhaps be better characterised by our Penhaligon roots in our campaigning for Cornwall and the power of the people.

We have had the opportunity to debate some of the many and varied issues raised by the Bill. Some of our concerns have been satisfied, but there is plenty of meat still to debate on Report.

Eric Illsley (Barnsley Central, Labour)

I thank hon. Members for their comments, which I will relate to my co-Chairman. I add my thanks to the Clerk, the Hansard reporters, the attendants and the police for their assistance to me.