Orders of the Day — Housing Grants, Construction and Regeneration Bill [Lords]

Part of the debate – in the House of Commons at 7:39 pm on 7th May 1996.

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Photo of Mr Den Dover Mr Den Dover , Chorley 7:39 pm, 7th May 1996

The industry has pondered long and hard about detailed wording. I am a civil engineer by profession, and the wording that the Institution of Civil Engineers sent to the Minister in the past seven days will need to be very carefully examined; I think that it is perfect. The institution also has a very good idea on the payment provisions, which I shall discuss later.

It is in the interests of all parties in the House, the construction industry and the nation to ensure that we get the right legal framework. If we have to take another few weeks or months—even after Royal Assent—so be it. At least there will be a consultation process. I very much welcome the Minister's statement earlier that we shall be able to debate those regulations in the House. That will give us a first-class opportunity to ensure, with some hindsight, that the thing is properly worked out in detail, which is extremely important.

The usual standard contracts used between client and contractor contain full payment conditions, specifying payment periods, but the Bill concentrates on special contracts between, say, the main contractor and his subcontractors. They are sometimes swingeing and very unfair. Sub-contractors fall into all sorts of financial traps, and they often have to stay on the job and see the contract out even though they are not being paid. I welcome the fact that the Bill addresses insolvency and that there will be a fair payments system and a test which presumably people must comply with from the start. Payments must be made properly at the right intervals.

I would like to suggest one amendment proposed by the Institution of Civil Engineers: that the word "valid" be inserted before the word "ground" in clauses 2110(a) and 110(b). The institution suggests that companies who withdraw their effort from a site because of non-payment must notify the adjudicator named and agreed under the contract of their decision, giving valid reasons for withdrawing their labour. In other words, a firm cannot say, "I am a sub-contractor on the job, but I am not happy so I shall withdraw my labour," without valid grounds. I hope that the Minister will consider allowing the adjudicator to make a pronouncement and determine whether valid grounds should taken into consideration when drawing up contracts.

In conclusion, the Bill represents a major step forward for the industry. I appreciate not only the craft and the care that has gone into the Bill's preparation, arising out of Sir Michael Latham's report, but the tremendous number of hours and days of discussion of it in the House of Lords. It is unusual for major legislation to come to the House following consideration in the other place. The House of Lords has done much to carve out the right form of words in part II of the Bill and I hope that the Standing Committee will examine it even more carefully. The Bill contains many good ideas and it will be a tragedy if Opposition Members seek to divide the House on a measure that is useful to the entire construction industry. I support all its provisions.