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Lords Chamber

Volume 571: debated on Monday 29 April 1996

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House Of Lords

Monday, 29th April 1996.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Chester.

Royal Assent

My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

  • Finance Act,
  • Education (Student Loans) Act,
  • Audit (Miscellaneous Provisions) Act,
  • Northern Ireland (Entry to Negotiations, etc) Act,
  • Rating (Caravans and Boats) Act.

Bosnia: Implementation Of Peace Agreement

2.36 p.m.

Whether the intended timetable for international operations to consolidate peace and establish civic order in Bosnia is being maintained.

The Minister of State, Foreign and Commonwealth Office
(Baroness Chalker of Wallasey)

My Lords, while much remains to be done, good progress has been made in implementing both the military and civilian aspects of the peace agreement on Bosnia and Herzegovina. Forces are separated and are withdrawing to barracks. Reconstruction work is under way and preparations are being made for elections to be held by the middle of September.

My Lords, I am grateful for my noble friend's reply giving such helpful information. While the Implementation Force (IFOR) seems to be carrying out its appointed tasks on time, have the various factions been complying with the Dayton agreement's timetable? As IFOR is not responsible for the civilian part of the agreement, what are the prospects of the Bosnian leaders co-operating and reaching working relationships with each other?

My Lords, I thank my noble friend for his supplementary question. He is right that there have been a few difficulties, but compliance with the military deadlines has been largely satisfactory. All forces were withdrawn behind zones of separation and from areas transferred between entities within the given time frame. Full details of the parties' forces and weaponry were submitted to IFOR according to schedule. A few deadlines were missed, three of which were technical; one was concerned with foreign forces. But the lapses have been due more to technical difficulties than to wilful obstruction.

On my noble friend's second point about reconstruction, I opened the Reconstruction Conference for British business interests this morning in London. I was glad to see leaders from each of the three communities present. They know that the only way to make peace work is to have reconstruction; reconstruction means reconciliation as well.

My Lords, will the noble Baroness go further into the military side? Are the Dayton disarmament—as opposed to merely reporting—deadlines being kept to? How is that to be reconciled with the United States-led plan to levy billions from such countries as Turkey, Iran, the Gulf states and Malaysia for armaments to arm the Moslem government forces?

My Lords, first, the final military deadline to withdraw heavy weapons and troops to barracks or to demobilise them which passed on 18th April showed some incompleteness. But IFOR now says that, as I said a moment ago, it is largely due to technical difficulties rather than wilful intent. Certainly IFOR will continue to pursue an active approach in order to secure full compliance with all the military requirements of the peace agreement.

On the second point, throughout the time we have been involved since 1992, we have underlined and reaffirmed subsequently our long-standing view that the supply of arms to the region, from whatever source, risks fuelling further confrontation. Obviously it could threaten the security of our troops and all other troops on the ground. We have had assurances from the United States Administration that they were not supplying arms to the Bosnians. But now that the embargo is over and the Dayton Peace Agreement is signed, we are trying to work closely with the United States to ensure that the Dayton Peace Agreement is implemented in every way that it can be. Anything that the United States may do of a nature—though not of the detail—that the noble Lord suggested is quite separate from IFOR. Anything the United States does must be consistent with the arms control provisions of the Dayton agreement.

My Lords, first, can my noble friend confirm that the Croatian Government have now handed over all the war criminals indicted? Secondly, does she believe that it will be possible to carry out the elections, bearing in mind the hundreds of observers who must go there and who require transport, interpreters and hotel accommodation?

My Lords, the handing over of all indicted criminals is not yet complete but it is being worked on actively. As my noble friend knows, IFOR is working on it, with us.

As regards the elections, I realise that the numbers of people who will be required for the elections will be greater than have had to be accommodated before in hotels. But the best will be done to make them comfortable in carrying out their tasks. When I consider what some election monitors have enjoyed in other parts of the world, I am sure they will be warmly welcomed. After all, it will be September in Bosnia and the weather may not be quite so inclement as at other times.

My Lords, perhaps I may wish the noble Baroness many happy returns.

Am I correct in believing that when the British Government decided to give support to the Dayton agreement and the international force, they were quite firm that British troops would be withdrawn after a year? Would that decision be in any way altered if the United States Government decided to retain troops in Bosnia beyond one year, as was reported in, I think, the Sunday Telegraph yesterday or another Sunday newspaper?

My Lords, first, I thank the noble Lord for his good wishes. It is good to be 21 yet again.

As regards his substantive question, it is much too early to take decisions about IFOR downsizing or as to what may happen at the end of 1996. As I believe the noble Lord is aware, NATO is resolved to complete its mission on time. We hope that the democratically elected political structures will, as my noble friend Lord Finsberg intimated, take the country forward peacefully. But it is too early to speculate about what the Americans may do, or, if the Americans take a certain course of action, what we might do. These are early days. However, we are working with a big package of reconstruction which will help more than anything else to bring normality back to that area. It is on that that we must concentrate.

My Lords, although my noble friend got in first, perhaps I may add my birthday wishes.

The Minister will no doubt be aware that there are some 1 million displaced persons in Bosnia and at least another million outside Bosnia. Of the 300 million to 400 million dollars that the UNHCR has asked for from the international community to cover the cost of the resettlement of these people, will the Minister tell the House how much has been promised? What will be the British Government's contribution to that figure? Given that the number of Bosnian refugees in this country is quite small, may I assume that the Government will pay, as the UNHCR has requested, for the repatriation costs of those Bosnians who are present in the UK?

My Lords, I shall have to let the noble Baroness know the exact proportion of the 300 million to 400 million dollars the UNHCR has received so far. I am not up to date on that. Britain has contributed some £332 million to Bosnia over the past four years, helping to keep people alive and to start the reconstruction, in particular the reconnection of utilities.

I am at this moment in discussion. Next week I shall be in Bosnia. After that, I may be able to answer some of the questions in a little more detail.

Mr Andreas Pavel: Legal Aid

2.46 p.m.

What was the total payment by way of legal aid to or on behalf of Mr. Andreas Pavel in connection with his action against Sony Walkman.

My Lords, it is too early to say what the total costs to the legal aid fund will be in respect of the appeal proceedings between Mr. Pavel and Sony. These costs will be known only when the final bills have been taxed.

My Lords, I thank my noble and learned friend for that reply. Can he confirm that the amount paid in this way will be substantial? Can he indicate the justification for the British taxpayer being called upon to finance litigation between two aliens?

My Lords, the Appeal Court hearing lasted for six days. Therefore, I think that I can safely answer the first branch of my noble friend's question in the affirmative: the payments are likely to be substantial.

As regards the second branch, the dispute was about the infringement of a British patent by sales of equipment within the United Kingdom. As such, these were proceedings in which the English courts had jurisdiction. As I explained on the last occasion, when Mr. Pavel came first to this country to litigate, he did so in the patents county court and had funds with which to support the litigation. By the time that litigation was finished, he was apparently financially eligible for legal aid. The legal aid authorities were ultimately provided with legal advice to the effect that the prospects of success were such as would justify the grant of legal aid.

My Lords, does not my noble and learned friend agree that at first sight it seems strange that Mr. Pavel, who is not a British subject, who has never paid taxes here so far as we know, and whose only connection with this country is that he has a hand in our taxpayers' till, should have been granted legal aid? However, on reflection, does my noble and learned friend agree that, had Mr. Pavel, as a citizen of Europe under the Treaty of Union, not been granted legal aid, we should have been guilty of discrimination between one citizen of Europe and another?

My Lords, it is not a condition for the grant of legal aid to anyone that he has to pay tax in this country. Indeed, quite a number of people who qualify for legal aid are, by reason of that fact, giving evidence that they are not qualified to be taxpayers.

So far as concerns the detailed information as regards Mr. Pavel, as I explained last time, I read in newspapers matters along the lines that my noble friend has pursued. But, so far as I personally am concerned, and officially, the Legal Aid Board is debarred from communicating to me facts which it learns as part of the application for legal aid. But, assuming the facts are as my noble friend put them, the last point that he made would have force.

My Lords, does the noble and learned Lord share the view of the Court of Appeal that the proceedings became unnecessarily complicated and therefore protracted, so that the purposes of the establishment of that court were in this case frustrated?

My Lords, the view that the noble Lord expressed was stated by all three judges in the Court of Appeal and obviously with good reason. It is fair to say that they thought that the proceedings in the Court of Appeal itself were somewhat elaborate. I noticed, for example, a remark from one of the Lords Justices to the effect that they were "benefited", or some such expression, with some 16 core bundles. That suggests to me that they thought that the preparations had been somewhat over-elaborated, even in the Court of Appeal where they themselves were in charge—though presumably, by the time that they were in detailed control of the case, the 16 core bundles had landed on their desk.

My Lords, can my noble and learned friend say when we shall know how much the British taxpayer has had to fork out in order to subsidise that litigation between aliens?

My Lords, I cannot do so in any detail. However, I can repeat that it will be when all the Bills that come in have finally been taxed. Certainly, that may be some time. In a sense, my answer gives a process by which the date can be determined, although I cannot give the date itself.

My Lords, can the noble and learned Lord say which countries of the European Union give help to British citizens in litigation in those countries?

My Lords, there are legal aid schemes in most of the countries. Their conditions vary somewhat. My understanding is that, generally speaking, British citizens will be entitled to participate in them on the same basis as nationals of their own countries.

My Lords, does the noble and learned Lord agree that perhaps the noble Lord, Lord Tebbit, is being a little misleading in saying that Mr. Pavel does not pay tax in the UK? Perhaps the noble Lord, Lord Tebbit, meant that Mr. Pavel does not pay income tax. But are there not many kinds of tax, such as VAT, airport tax, insurance policy tax and so on? Perhaps Mr. Pavel does pay tax in those respects.

My Lords, I know that for some time there have been quite a variety of taxes in this country. Whether or not Mr. Pavel has paid all or any of them, I do not know. It is perfectly possible to pay even income tax in this country while residing for at least part of the time somewhere else.

My Lords, is it not the case that some of the cases of legal aid which are brought before this House justify an inquiry into the way in which the system now works?

My Lords, I am extremely grateful for that question from the noble Lord. I entirely agree with it. I am as busy as I can be in trying to carry forward the representations that have been given to me in response to a consultation paper on legal aid.

Professor Mohammed Al-Mas'ari

2.54 p.m.

What decision they have now made on the substantive application for political asylum by Professor Mohammed al-Mas'ari.

My Lords, my right honourable friend the Home Secretary has decided that Dr. al-Mas'ari should be given leave to remain for an initial period of four years.

My Lords, will the Minister confirm that Dr. al-Mas'ari is outside his country of origin and that he does have a well founded fear of persecution in Saudi Arabia within the meaning of the United Nations Convention on Refugees? If so, what criterion does he lack that would have enabled the Home Secretary to grant him full refugee status?

My Lords, I cannot confirm that. The noble Lord himself knows that this case has not been considered substantively. Our obligation is to ensure that a person is not returned to a country in which he has a well founded fear of persecution. We have not determined whether Dr. al-Mas'ari does have a fear of persecution and we do not know whether it is well founded. But since we do not seek to return him to a country in which he claims he would be unsafe, we cannot possibly be in breach of our obligations under international law.

My Lords, are the Government considering some additional legislation to require those to whom asylum is accorded to refrain from using this country as a base for hostile actions or propaganda against another country with which normal diplomatic relations exist?

My Lords, perhaps I may refer to what the Prime Minister said when he was returning from the summit at Sharm el-Sheikh in March. He said that we were determined to take steps to ensure that those who foster terrorism and conditions in which it can flourish should not benefit from the protection of the refugee convention. He went on to say that we are also looking at the scope for extending offences relating to incitement and conspiracy, so that they apply to a wider range of acts to be committed overseas.

My Lords, as a former ambassador to Saudi Arabia, may I slightly rephrase the question put by the noble Lord, Lord Campbell of Croy? Will the Government give an assurance that, while respecting the judgment of the courts, they take every possible action to protect our very important political, financial, commercial and strategic interests in Saudi Arabia?

My Lords, I take absolutely the sentiment underlying the comments of the noble Lord. The relationship between the United Kingdom and Saudi Arabia remains close and strong. It is a valued friend and ally. Saudi Arabia continues to play a vital role in maintaining stability in the Middle East. The strength of its economy and its role as an oil producer remain important to the economic health of the industrialised world.

My Lords, does the Minister agree that Professor al-Mas'ari has always underlined his commitment to peaceful reform in his country of origin? To refer in this context to the Prime Minister's statement at Sharm el-Sheikh, when he was speaking about terrorism and incitement to conspiracy, which are criminal offences under our law, is therefore grossly misleading and has no relevance in the terms of the Question. With regard to the question put by the noble Lord, Lord Campbell of Croy, does she agree that it would be impossible to discriminate against refugees by applying restrictions on their freedom of expression which do not apply to our own citizens?

My Lords, I do not believe that I misled the House in any of the answers that I have made at the Dispatch Box. We are concerned about our relationships with the Saudi Arabians. We believe that those relationships are important and we do not believe that they should be put at risk. But that is not helped by Dr. al-Mas'ari himself, who openly declares that he is trying to bring down the Saudi Arabian Government. We are simply concerned, in whatever activities he undertakes—so far I have no grounds for saying that he is acting illegally—that he does not put at risk a very special relationship that we have with Saudi Arabia.

My Lords, will the Government deport this individual if it can be determined that he has organised acts of terrorism using the UK as a safe haven?

My Lords, if that were the case, we should have resort to other powers under the United Nations convention of 1951. We do not have an extradition treaty with Saudi Arabia. The tests for extradition are very strong indeed but the provisions of the refugee convention do not preclude extradition of persons whose actions are such that they no longer merit the protection of the convention.

My Lords, in the light of the last question put by the noble Lord, Lord Avebury, is my noble friend aware that the perpetrator of the National Guard bombing in Riyadh has admitted to being the disseminator of al-Mas'ari's faxes?

My Lords, it is just that sort of activity that caused us anxiety over this gentleman. Should evidence of any activity which damages security be forthcoming, we would consider it carefully.

My Lords, does not my noble friend agree that another issue is involved in this matter? We should not be concentrating solely on whether or not we believe that the activities of Mohammed al-Mas'ari will do our country damage; we should be concentrating on the fact that when someone is given asylum he becomes a guest and that guest has a duty in return for the hospitality given. That is widely recognised in every country. We should approach this matter in terms of expecting those who receive asylum from us to consider our interests because they have now become guests of our country. It is wrong that we should spend all this time urging commercial interests—though they are important—when there is a simple issue of the duty of a guest to return honest and decent behaviour for hospitality.

My Lords, I know that a great deal of sympathy—which I share—is felt for what has been said by my noble friend. We have international obligations, as was mentioned by the noble Lord, Lord Avebury, under the convention that if asylum and/or exceptional leave to remain is granted, the United Kingdom law applies equally. But I repeat that it is a privilege to be given exceptional leave to remain and/or asylum and/or citizenship. It is extremely important that security is not threatened and that our relationships with other countries in the world are not threatened.

Bse (Health)

3.1 p.m.

What is the imminent risk of injury to health which has led to the banning of meat from cattle over 30 months of age from entering the food chain.

My Lords, Section 13(1) of the Food Safety Act 1990 enables the Minister to make an emergency control order if it appears to him that, inter alia, there may be an imminent risk of injury to health.

The SEAC statement of 20th March outlined proposed new measures to counteract just such a potential risk. The SEAC recommended the deboning of all meat from animals over 30 months old and stated that, as long as all their recommendations were in place, the risk from eating beef would be extremely small. As it was not possible to put in place deboning measures immediately, the Government acted expeditiously to remove from the human food chain meat from animals over 30 months old as an interim measure.

My Lords, I thank the Minister for that Answer. However, is he aware that the Government are widening the original powers that they took under the order? As the Minister said, correctly, Section 13(1) of the Food Safety Act requires an,

"imminent risk of injury to health",
before the emergency control orders can be brought in. Ministers have continually told us over the past five weeks that beef is safe to eat. Where is the imminent risk to health, therefore, as required by the Act?

My Lords, I pointed out the word "may" that appears in the Act. The possible imminent risk to health is that which we avoided by the measures that we have taken.

My Lords, does not my noble friend agree that the scope for calm and rational action in this field has been made much more difficult by the unjustified export ban on British beef by Brussels? That confirmed in the public's mind that the linkage between BSE and CJD is not a risk but is a fact. That thereby accelerated and deepened the collapse of the beef market across the whole of the continent of Europe.

My Lords, he who shoots before thinking should make sure that his own foot is not in the way.

My Lords, there has been research in this country on the possibility of a connection between BSE and the human disease CJD, as well as research in the United States and other European countries. Is it not possible, therefore, to produce an internationally agreed statement on what the risk really is?

My Lords, there is widespread scientific understanding of the risk in terms of eating beef, which is negligible. However, there is no political agreement to say that.

My Lords, is there not a sharp contrast between the attitude of Her Majesty's Government towards the risk to health from BSE and the risk to health from the use of organophosphates? The Government require a high level of proof in the case of organophosphates and apparently a low level of proof in the case of BSE and CJD.

My Lords, the level of proof required is that which we can best establish. There is a fundamental difference between a disease which has a definable course and a definable cause and which we know how to avoid and one about which, as in the case of the potential link between CJD and BSE, there is so much that is unknown and uncertain.

My Lords, cannot my noble friend confirm that the definitive political statement on the risk of eating beef has been made? It was made by the European Communities Commissioner for Agriculture who said that beef was safe to eat. Under those circumstances, why do we fly in the face of such an authoritative statement and say that it may not be?

My Lords, we entirely agree with Commissioner Fischler that beef is safe to eat as a result of the measures that we have taken.

My Lords, in light of what has just been said, can the Minister comment on the news that came over the radio at 2 o'clock that all the other 14 European Union Ministers of Agriculture decided this afternoon to refuse to withdraw the ban on the export of British beef?

My Lords, are not the only questions about health in this sorry tale the growing doubts about the mental health of the European Commission?

My Lords, the Minister must still explain why Her Majesty's Government obeyed a Commission decision which was in itself illegal, and everybody knows that it was illegal, including those who issued it. Why do we obey it when it is illegal?

My Lords, we obey the law because it is the right thing to do and it is what we wish other people to do. If we disagree with the decision, as we do, the right action is to challenge it in the courts, as we intend to do.

My Lords, if it is possible to argue that a selective procedure can produce a substantial reduction in the incidence of BSE, as the Government claim, can the Minister tell the House why the scheme was not introduced before?

My Lords, the consequences of the 30-month rule are of great concern to dairy farmers—the isolation of cull animals from the beef market. Bearing that in mind and the fact that several beef breeds are embarrassed by the rule, have the Government given consideration to altering the 30-month rule to a fixed date?

My Lords, we shall give consideration to all such matters when the current interim order comes to be replaced by a permanent regulation under Section 16(1)(f)(ii) of the Food Safety Act 1990.

Business Of The House: Defamation Bill Hl

3.7 p.m.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Since the terms of this Motion are unusual, it may be for the convenience of noble Lords if I take a moment to explain what it is that I am inviting the House to agree to.

At both Committee and Report stages of the Defamation Bill, the noble and learned Lord, Lord Hoffmann, tabled a new clause. At present the privilege conferred by Article IX of the Bill of Rights of 1689 means that a court may not inquire, even at the behest of a Member of Parliament, into anything that he has said or done in Parliament. The proposed new clause provides that an individual member may waive that historic privilege if he wishes the court to take account of proceedings in Parliament in considering a case of defamation. These are potentially grave matters for Parliament.

In debate, arguments were put both for and against the proposed new clause. At Committee it was withdrawn in order that further consideration could be given to those arguments. On Report, a Division was called; but when the Question was put a second time, there were no voices on either side, the Division could not take place and accordingly the amendment was negatived.

The Companion to the Standing Orders makes it quite clear that,
"it is undesirable that an issue which has been fully debated and decided upon at a previous stage of a bill should be reopened by an amendment on Third Reading".
It is clear therefore that as matters stand your Lordships would have no further opportunity to debate the noble and learned Lord's proposed new clause. However, it was equally clear from debate in the House at Report stage that noble Lords wished and indeed expected that they would be invited to consider the amendment again on another occasion. It seems likely that this expectation contributed at least in part to the fact that the Division on the amendment did not take place.

In those circumstances, it seems desirable that we should seek to find a way of permitting the noble and learned Lord to table his amendment for Third Reading, if he should choose to do so. For that reason, I invite your Lordships to agree that on this occasion we should set aside the guidance of the Companion to the Standing Orders in relation to amendments at Third Reading. I hope that my explanation is of some help in asking your Lordships to agree to this Motion. I commend it to the House.

Moved, That, notwithstanding the practice of the House relating to consideration on Third Reading of amendments which have been fully debated and decided at a previous stage of the Bill, an amendment to insert a new clause (Evidence concerning proceedings in Parliament) may be considered on Third Reading of the Defamation Bill [H.L.].—(Viscount Cranborne.)

My Lords, as I must accept some responsibility for what happened at the Report stage, I should like to support what the noble Viscount has just proposed. I would add only one point. There is an unreasonable and very inconvenient rule that manuscript amendments may not be moved at Third Reading. Although that has twice been considered by the Procedure Committee, the rule still stands, so, unless the amendment of my noble and learned friend Lord Hoffmann is promptly tabled, there will be no opportunity to move an amendment which may well be desirable if the matter is to be decided at all in your Lordships' House rather than in the other place which is primarily concerned.

My Lords, I note what the noble and learned Lord has said and I am sure that the noble and learned Lord, Lord Hoffmann, will also have noted it. I certainly look forward to the debate at Third Reading if the House approves this Motion.

On Question, Motion agreed to.

Damages Bill Hl

3.12 p.m.

My Lords, I beg to move that this Bill be now read a second time.

This is the fourth Bill I have introduced this Session to give effect to recommendations for law reform. I am, as always, pleased to be able to bring before your Lordships a Bill to give effect to recommendations of the Law Commission. This Bill gives effect to recommendations made in its report on Structured Settlements and Interim and Provisional Damages, which is the first report presented as a result of its current examination of the principles governing and the effectiveness of the present remedy of damages for monetary and non-monetary loss, with particular regard to personal injury litigation. The Law Commission has already published consultation papers on other aspects of the law of damages, and I look forward to considering further reports and recommendations on these subjects when they are published. The present Bill is the result of its consideration of the use of structured settlements as an alternative to, or in conjunction with, lump sum awards, and the interconnected interim and provisional damages regimes.

I am particularly glad to remind your Lordships that a number of the recommendations made in this report have been included in legislation which completed its passage during the last Session, very soon after the recommendations were made. That accounts in part for the difference between this short Bill, and the draft annexed to the Law Commission report. As your Lordships will be aware, a number of the recommendations related to the tax treatment of payments made under structured settlements. Such recommendations are most appropriately to be implemented in a Finance Bill, applying on a United Kingdom basis. Accordingly, most of them were included in the Finance Act 1995, and the remaining revenue provisions (which are complementary to provisions included in this Bill) have been added to the current Finance Bill during its Committee stage in another place.

One other recommendation, which was peculiarly suited for inclusion in other legislation, was included in the Civil Evidence Act 1995. That Act, implementing the recommendations of another Law Commission report, effectively abolishes the rule against hearsay evidence, and in response to the suggestion made by the noble Lord, Lord Mishcon, at Second Reading, we were able to incorporate a clause to deal with one special kind of hearsay evidence; namely, the actuarial tables published by the Government Actuary's Department.

Those are the provisions which might have been thought to be missing in this Bill, which in several other respects goes somewhat further than the Law Commission Bill. Having explained the apparent omissions, I propose, with your Lordships' leave, to explain the reasons for the other differences before offering a brief outline of the Bill's provisions.

The Law Commission referred in its report to a particular problem which had arisen in the context of structured settlements offered in the public sector. Although it is a normal feature of private sector structured settlements that an annuity is purchased to provide the injured person with periodical payments during his lifetime, government departments and other public sector bodies are more likely to provide such payments out of their own resources. A structured settlement offered from the public sector in this way is often described as "self-funded". There had, however, been some reluctance to accept self-funded structured settlements offered by public sector bodies which could, in theory, cease to exist without their liabilities being taken over, unless such settlements were backed by some form of government guarantee. The Law Commission expressed its support for legislation which had already been proposed to allow the Secretary of State for Health to provide appropriate Crown guarantees, and recommended that a general solution applicable to all departments should be the longer term aim. That we have done, and the general solution is in Clause 6, providing further facilitation for the use of structured settlements.

The Law Commission had also expressed concern that, in the assessment of damages for future pecuniary loss, particular discount rates were being used, although the market had developed in such a way that other rates could be applied to produce a more accurate assessment of a plaintiffs loss. These are the discounts which must be applied to reflect the fact that the plaintiff receives an immediate lump sum payment. That payment compensates, in advance, for a loss which is not itself immediate, but will be suffered over a number of years. The assessment must therefore take into account the value of the income which the lump sum can be expected to produce when the plaintiff invests it, so that the award does, so far as possible, correspond to the loss he will actually suffer over the same period.

The Law Commission's recommendation was that the courts should be required to take into account the net return on an index-linked government security, but that I should have power to prescribe an alternative indicator if no index-linked government security existed. Clause 1 of the Bill is designed to meet the concerns expressed by the Law Commission, but to do so in a way which does not run any risk of imposing an unnecessarily rigid structure on the courts, whose primary concern is to produce a just result in every case. The Bill therefore makes provision to ensure that the courts will always be able to make use of the best reflection of market opinion as to what real interest rates will be in the future, by providing a wider power for the Lord Chancellor and the Secretary of State for Scotland to prescribe from time to time the rate of return of which account should be taken. The wide power in Clause 1 can be used to assist the court as and when necessary. Prescribed indicators should not of course prevent the court from deciding that in the particular case before it, some other indicator will do the job better. That is one flexibility which needs to be preserved. Nor should we create a situation whereby the courts might find themselves bound to take into account, or to continue to take into account, a particular specified indicator, even though different, new, indicators might have become available and become accepted as better tools for assessing plaintiffs' losses accurately. It is undoubtedly right that the courts should have the facility to adopt indicators illustrating the expertly recognised probabilities at that time, in the absence of evidence of special circumstances or other considerations. Noble Lords will be aware that this is what the courts are constantly seeking to do, and that difficulties perceived by the Law Commission, before it published its report, may no longer be apparent. I am at present conducting a thorough examination of the discounts now being applied and other suggestions which have been put forward as possible representative investment patterns, which I shall of course take fully into account, in consultation with the experts, before exercising such a power.

The Bill also develops the Law Commission's recommendation for clarifying and rationalising the interaction between the provisional damages regime and the Fatal Accidents Act 1976 and the Law Reform (Miscellaneous Provisions) Act 1934. Provisional damages may be awarded where there is a recognised risk that the injured plaintiff may develop a further disease or suffer particular deterioration, but accepts provisional damages assessed on the basis that he will not, subject to the right to apply for further damages if he does. The Law Commission found the present position uncertain and unsatisfactory, and recommended clarification of the law so that where a plaintiff dies of his injuries after receiving a provisional award, his dependants will not be precluded from claiming for loss of dependency. There should not, however, be any element of double recovery. We have modified the clause proposed by the Law Commission so that the provision against double recovery gives preference to the dependant's claims, rather than the estate's. That is in line with the rule which applies generally when there could be duplication between the claims of dependants and the estate. It is very similar to the position which already exists in Scotland, and no corresponding clarification of Scots' law is needed. Otherwise, although the Law Commission's recommendations related to England and Wales only, they have equal application and have been adopted for Scotland and Northern Ireland.

Subject to those points which I have mentioned, fuller explanations of the current law and the proposed changes may be found in the Law Commission report to which I have referred. Full Notes on Clauses are available for any Members of the House who may wish to examine the provisions in greater detail.

Clause 1 provides the power, which I have explained, to prescribe the rate of return of which account should be taken. Clause 2 enables courts, with the consent of the parties in personal injury actions, to make orders for damages to be paid wholly or partly by periodical payments. It is, of course, an essential feature of structured settlements that at least some of the damages will be paid in that way and this clause resolves any doubts whether the court has power to order a structured settlement by consent.

As I have explained, Clause 3 prevents an award of provisional damages, which was made to a person who subsequently died from the injuries for which those damages were awarded, from barring an action under the Fatal Accidents Act 1976 for the benefit of his dependants, but it prevents the same pecuniary losses being taken into account more than once in assessing the damages payable by the defendant.

Clauses 4 and 5 allay possible concerns, in private sector structured settlements, that beneficiaries may not be adequately protected in the event that the insurance provider should fail at some time during the duration of the settlement. Phasing payments over many years, rather than paying a lump sum now, clearly exposes claimants to some risk of this happening.

There is already considerable protection for the policyholders of failed insurance companies under the Policyholders Protection Act 1975. The amount normally payable by the Policyholders Protection Board is 90 per cent. of any valid claims so that the consumers must take at least some responsibility for choosing their insurance provider wisely. Nevertheless, because of their special circumstances, it is the view of the insurance industry and the Government that beneficiaries of structured settlements should have full protection under the Policyholders Protection Act 1975. Clause 4, therefore, amends the Policyholders Protection Act 1975 to provide 100 per cent. protection to beneficiaries under structured settlements as defined in Clause 5.

Clause 6 achieves a similar objective in the context of public sector structured settlements. It too overcomes what may be a disincentive for a plaintiff to accept a structured settlement unless it is seen to be fully secure. It confers a statutory power for Ministers to guarantee payments due under self-funded structured settlements entered into by public sector bodies. There is equivalent provision in the schedule for guarantees by Northern Ireland departments.

I believe that this is a useful law reform measure and I commend it to the House.

Moved, That the Bill be now read a second time.—(The Lord Chancellor.)

My Lords, before my noble and learned friend sits down, can he assist me on one small matter? In the Explanatory and Financial Memorandum, this is stated:

"The Bill's only likely effects on public expenditure are that any exercise of the power in clause 1 could affect the size of awards of personal injury damages against government departments".
Clause 1 requires the courts, when determining the sum to be expected from the investment, to take account of such rate of return as may be prescribed. The question on which I seek my noble and learned friend's assistance is this: under Clause 1(3) it is provided that,
"Before making an order under subsection (1) … the Lord Chancellor shall consult the Government Actuary and the Treasury".
I can well understand the need to consult the Government Actuary; but why is it necessary to consult the Treasury, which is bound, according to the Explanatory Memorandum, from time to time to have an adverse interest in regard to the fixing of a particular rate at a particular level?

My Lords, certainly the Treasury may well have an interest of that kind in relation to the effect on damages against Government departments or the guarantee which is provided in respect of those damages. From that point of view, just like insurers and others, they may have an interest in being consulted. The Treasury has other expertise than that, particularly in relation to this forecasting business, which is essentially what lies behind the power in Clause 1.

In my submission, it is right—and it is in accordance with the Law Commission's report—that the Treasury should be consulted; but the consulter, which is the Lord Chancellor in the primary case, will use the results of the consultation appropriately. The Lord Chancellor himself is a prospective defendant. It is just possible that, from time to time, he may be a defendant, but I do not believe that that would be a proper consideration in relation to the setting of this sort of interest in a way that would damage the exercise. This is in accordance with what the Law Commission proposed, and I believe that it is a perfectly reasonable provision, taking into account the fact that it is a consultation only. I believe that your Lordships can rely on the holder of my office to do the consultation properly.

3.35 p.m.

My Lords, as the noble and learned Lord on the Woolsack has said, this is another Bill to implement recommendations of the Law Commission. It arises out of a report which considered whether the current arrangements for structured settlements in personal injuries litigation needs to be rationalised or extended.

The Bill also deals with two other important issues in personal injury claims: these were considered by the Law Commission. The first is the closing of a gap in the provisional damages regime provided for by Section 32A of the Supreme Court Act 1981 and the second arises because the courts reduce awards made to victims to compensate them for their future loss of net income and the costs of care, in order to take account of the fact that they receive compensation in the form of an immediate lump sum which can be invested. The question is this: what rate of return should the courts assume will be achieved by that investment? The deduction which the courts make from compensation to take account of what is called "accelerated payment", has to be matched by an assumption about the rate of return that will be achieved from investment of that sum. If the assumption is of too high a rate, then the victim will have been under-compensated; and if the assumption is of too low a rate, he will have been over-compensated. What is required is rules that offer the best prospect of the assessment turning out right over perhaps many years, during which the real rate of return on the investment will necessarily vary.

I deal first with the parts of the Bill which concern structured settlements. The common sense of the Law Commission proposals on structured settlements is fully accepted by those with practical knowledge of personal injury litigation and we on this side of the House welcome them.

A structured settlement is a fairly new development in this common law jurisdiction—not so new in others. It is a form of damages alternative to the usual lump sum award, which the victim is left to deal with as he chooses. But it is not imposed by the courts: it is agreed voluntarily between the parties. The defendant's insurer reaches a settlement with the plaintiff accident victim under which a damages award is designed to provide periodic payments for life. To fund the arrangement, the insurer purchases an annuity from a life assurance company. The payments are "structured" to meet the plaintiff's needs and are free of tax in his or her hands. A conventional lump sum award, however, when invested, is subject to tax in the usual way.

The development of structured settlements has added another term of art to the world of personal injury claims, but there is no doubt that they are an important step forward in dispute resolution.

Under such a settlement the plaintiff accident victim can be assured of regular index-linked payments for life. Also, the victim—and his or her family—are relieved of the burden of managing a large sum of money combined with the removal of the associated risk of dissipation of the sum, which, sadly, can happen in some cases. Of course, both parties to the settlement may benefit from the tax-exempt status of the payments. The advantages on both sides mean that early settlements are encouraged, with consequent savings in costs and time. There is, therefore, a very real sense in which everyone may gain from a structured settlement where appropriately made.

One of the main issues considered by the Law Commission was the need to clear away certain obstacles to the tax exemption of the periodic payments made to a victim under a structured settlement. That was dealt with in the Finance Act 1995 and in the Finance Bill. The insurance life office may now make the periodic payments directly to the plaintiff victim, whereas previously, in order to be tax free, such payments had to be made indirectly through the defendant insurer. The Bill now before your Lordships seeks to implement the remaining recommendations on structured settlements in the Law Commission report.

I repeat that reaching a structured settlement is for the parties involved, and for them alone. Therefore, although the Bill introduces measures that will facilitate the reaching of effective structured settlements, it still preserves their voluntary character. As the noble and learned Lord said, the courts are not given the power to impose such a settlement. The Law Commission considered such a proposal, only to reject it after consultation. We, too, think that the imposition of structured settlements by the courts is not the way forward. Structured settlements should result from free negotiation and agreement between the parties. A judicial power of imposition would he inconsistent with that approach.

A very important part of the structured settlement provisions of the Bill concerns the protection provided for a victim who is receiving payments under a settlement should the life assurance company be liquidated. The noble and learned Lord drew attention to that. Clauses 4 and 5 extend the provisions of the Policyholders Protection Act 1975 so that victims with a structured settlement are given 100 per cent. protection of their annuity policy. The protection of victims must be a priority. It is right in principle, and in practice it is necessary, for the successful development of structured settlements.

Another essential victim protection measure in the Bill is the power given to the relevant departmental Minister to guarantee structured settlements agreed by public sector bodies—for example, National Health Service trusts or Ministry of Defence bodies. That is dealt with in Clause 6. When a public body enters into a structured settlement, the payments made under it are "self-funded" by the public body, rather than being funded by the purchase of an annuity policy in the market. That is cost effective, but the quid pro quo for the benefit to the public purse must be that the Crown is obliged to guarantee the payments under the settlement. It could not be right that a victim suffering the misfortune of injury at the hands of a public body, as distinct from a private defendant, should be under any disadvantage.

The final provision implementing a Law Commission proposal on structured settlements comes in Clause 2, which expressly empowers the courts to make an order in a personal injuries action for damages, in whole or in part, to be paid periodically where the parties agree. That is non-contentious. It ensures that there is no ambiguity about the courts' power to order structured settlements where the parties consent.

I turn now to the other issues dealt with in the Bill. One issue which has been the subject of much recent argument in the courts is the appropriate investment rate to be used in discounting a lump sum to take account of the "accelerated payment" element in compensation for future pecuniary loss. The discount reflects the fact that the money is available to the plaintiff sooner than it would otherwise have been had he been able to continue earning, so allowing the plaintiff to earn a return on it. There has been a general assumption by the courts that they should use an investment rate of between 4 and 5 per cent. so as to make the appropriate discount. However, there is gathering concern that the real rate of return on investments is significantly lower than 4 to 5 per cent. so that victims are being under-compensated.

The percentage figure of 4 to 5 per cent. is taken to have been laid down by a 1979 decision of your Lordships' House in its judicial capacity. The figure may—although even that is questionable—have been right for its time, but should not, I would suggest, be regarded by the courts as an invariable prescription for all time. That issue comes before the Court of Appeal later this year.

If it is the fact that victims are being under-compensated because the investment rate of 4 to 5 per cent. is too high today, so that the discount made is too great, that is unacceptable. It is imperative that compensation is accurately assessed so that future income loss, and care expenses, are adequately covered.

When the Law Commission looked at this issue, it recommended, as the noble and learned Lord mentioned, that the courts be required to take into account the net return on an index-linked government security, known as an ILGS, but permitting departure from that rate where it can be shown that a different rate would be more appropriate in the individual case.

That proposal is sensible, subject to one qualification, to which I draw attention. The application of the ILGS rate is likely to be an accurate measure of the real return on an investment where the risk is minimal. A requirement that the courts must take into account that rate also meets the need for legal certainty and avoids the significant costs involved where both sides seek to reply on expert witnesses—they cost money—to establish the appropriate rate. The Law Commission received only a few representations setting out why it might be necessary for a court to depart from that rate in any individual case. In the light of that, I wonder whether the Law Commission has not defined too widely the circumstances when a different rate might be applied. If such circumstances are widely defined, that will be an invitation to the parties to present costly expert evidence.

Clause 1 of the Bill is designed to implement the Law Commission proposal. Subsection (2) applies the commission formula for departure from the prescribed rate. I ask the question, therefore: might not the usual "save in exceptional circumstances" formula be preferable? We shall return to that matter in Committee.

There is one significant difference between Clause 1 as drafted and the Law Commission proposal: Clause 1 would leave the prescribed rate to be determined by the Lord Chancellor, by statutory instrument, after consulting the Government Actuary and the Treasury, as has already been said. Presumably, this discretion is necessary to ensure flexibility over time in defining the appropriate ILGS rate. However, we have a concern that that discretionary power is too widely defined, leaving the Lord Chancellor of the day free to depart completely from the recommended ILGS rate if he so chooses. We shall be inviting discussion and consideration of that point by appropriate amendment in Committee.

Of course, a new prescribed investment rate, in line with the ILGS rate, will tend to mean higher personal injury awards. That in turn may mean higher insurance premiums. However, the justice of the case clearly speaks in favour of the change. The majority of personal injury claims are of modest proportions. The adoption of the new rate will have a limited effect on those. Where the impact may be significant is on the very large claims—for example, serious industrial injury claims—but that is precisely where it is so imperative to ensure that there is substantial compensation to meet the needs of that class of case.

One further change recommended by the Law Commission and implemented in the Bill closes an anomalous gap in the provisional damages regime for personal injury claims under Section 32A of the Supreme Court Act 1981. As the noble and learned Lord has said, the intended effect of Clause 3 is to ensure that, if provisional damages are awarded to a plaintiff victim on the basis that he or she has a right to apply for further damages if a particular disease or deterioration in health occurs in the future, but in the event he or she dies from the original injuries, then the dependants of the deceased can still claim under the Fatal Accidents Act 1976 in respect of losses not already covered by the original award. That proposal is clearly just and will receive the full support of this side of the House.

In short, we on this side of the House welcome the Damages Bill. It is essentially a non-contentious Bill for which the Law Commission should be applauded. The main issue which we think will need attention in Committee is the application by the courts of the investment rate which is recommended by the Law Commission as the most appropriate rate to use to reduce awards for future financial loss so as to take account of the accelerated payments. We believe that the House will wish to consider whether the noble and learned Lord, in setting the prescribed rate, is given too much discretion to depart from the recommended rate; that is, the rate of return on index-linked government securities. Also, we believe that the circumstances in which the courts might depart from that prescribed rate are too widely defined. We will invite the consideration of your Lordships to those questions by way of appropriate amendments in Committee.

3.41 p.m.

My Lords, I thank the noble and learned Lord the Lord Chancellor for his introduction of this short, useful Bill. Clause 1 is designed to remove some of the uncertainty from the capitalisation of future pecuniary loss. That is often a substantial element in personal injuries damages awards, so that a small fractional difference in the rate of return which is assumed by the court or by the lawyers in their negotiations can mean many thousands of pounds more or less in the damages which are awarded. Assessments of future losses have become highly sophisticated, having to take into account a great number of contingencies and permutations, apart from the question of the appropriate multiplier. Therefore, anything which reduces the uncertainty, reduces the cost of litigation and assists settlement without prolonged proceedings is helpful. To that extent, the Bill is welcome.

But, as the noble Lord, Lord Irvine of Lairg, said, at present the law is in an acute state of uncertainty. In so far as there are guidelines from the higher courts as to the appropriate rate of return they are not applied consistently, such that practitioners have difficulty in advising properly as to settlement and as to the likely outcome. Some judges apply what is seen to be the conventional 4.5 per cent. net return, while others have been persuaded to apply a net return of 3 per cent. Like the noble Lord, Lord Irvine, I understand that a number of these cases are subject to appeals to the Court of Appeal to be heard in June. Meanwhile, cases are being settled on the basis of "splitting the difference" or are being adjourned, at least in respect of the multiplier.

To some extent, the differing decisions of the courts can be explained by the way in which individual judges in particular cases have been persuaded by actuarial evidence and argument. Leaving aside the old joke about the ability of two different actuaries to provide three different answers, actuaries will often argue, perfectly reasonably, that different net returns are justified in different cases, even if they may be decided only months apart. However, one cannot help feeling that they are gazing, however skilfully, into a crystal ball which remains more opaque than is helpful.

The Bill therefore is welcome in allowing for a prescribed rate of return, but it still allows for some flexibility. The court is required only to take the prescribed rate into account and not to apply it come what may. Clause 1(2), to which the noble Lord, Lord Irvine, referred, allows the court to be persuaded that another rate is more appropriate. However, it is inescapable that what is a desirable flexibility in the view of one person is undesirable uncertainty in the view of someone else.

As happens in cases at present, under the Bill defendants and their insurers will argue that in reality a well-advised plaintiff with a large award is unlikely to stick rigidly to index-linked government stocks when, at very little risk, a higher rate of return can be obtained in a wider range of investment. The plaintiff's side will argue that he or she needs certainty and minimum risk.

The plaintiff's actual life span cannot be predicted. Costs of care may rise with future developments in technology, and, as was pointed out by one of the learned judges who considered one of the recent cases, there is a circular argument. The object of the exercise is to provide the injured plaintiff with an adequate sum to meet future loss. If the court assumes a higher rate, the plaintiff will be obliged to invest on such a basis to avoid his or her money running out. The rate of return is inevitably related to the risk. The court cannot tell an individual how to invest, but the court should not be expected to impose unnecessary risk. It should allow any apparent acceptable risk to be covered by the size of the award. It has to be remembered in these cases that the award is something which has often to last the injured plaintiff for the rest of his or her natural life.

So Clause 1(2), by retaining a discretion to deviate from the assumed rate, means that the uncertainty will not disappear altogether. It remains to be seen, if that clause stays in the form in which it is presently drafted, whether defendants will try to take advantage of it and require the calling of evidence as to investments. Actuaries will still be required in the larger, more complex, cases. I look forward to the debate in Committee which has been promised by the noble Lord, Lord Irvine of Lairg, on whether the balance between Clause 1(1) and Clause 1(2) has been struck correctly.

I can but hope that the last sentence of the financial memorandum to the Bill is intended to strike an optimistic rather than a pessimistic note when it says:
"Any exercise of the power in clause 1 could affect the size of personal injury awards against defendants generally, with consequential effect on insurance premiums".
One other matter which is worth considering in this area is that certainty and guidance in the field of personal injury awards have an impact on other areas of law where similar calculations have to be carried out. Family lawyers grapple with the same problem, although there are differences of approach. Family lawyers have led the field in calling for an industry standard, although family lawyers tend to expect divorcees to live in a less risk-free environment.

I should like to ask the noble and learned Lord some questions about Clause 1(3). Does he expect to carry out other consultations, apart from consultation with the Government Actuary and the Treasury? Does he envisage prescribed orders, producing a rate based on index-linked government stock? As I understand it, that was the proposal of the Law Commission. However, during the opening speech of the noble and learned Lord the Lord Chancellor reference was made to alternative indicators, by which I think he meant indicators which are alternatives to the ILGS rates. I believe that certainty in this area at an early stage is desirable.

One looks at Clause 8(2) for an indication that the Act will come into force two months after its passage. However, I understood the noble and learned Lord to indicate that the orders under Clause 1 would not come into force then but at a later undefined date. I would be grateful, as I believe practitioners would be, for an indication of the likely timetable, particularly as appeals are said to be pending. It may be helpful to know whether the Government intend to await the outcome of those appeals before deciding what order, if any, is to be made under Clause 1.

A related question, which I know concerns practitioners, is the commencement of the Civil Evidence Act 1995, to which the noble and learned Lord referred. Is it intended that that Act should be brought into force at the same time as this legislation, if enacted, or when an order is made under Clause 1? When is it expected that the 1995 Act will be brought into force?

I turn briefly to Clause 2 and the question of periodical payments. This proposal goes back to the Pearson Report of 1978. It was said of that report that it ran for 1,100 pages and managed to mention the word "actuary" only once. Awards of damages by way of periodical payments have advantages. They have advantages for the defendant who is anxious not to over-compensate a plaintiff who may die younger than expected, or where there is a risk of misuse of money. They have advantages for the plaintiff who wants the reassurance of a certain stream of income. It has also been said that judges and actuaries are not astrologers. Therefore, a lump sum award can never exactly estimate loss. Accordingly, structured settlements in particular and periodical payments in general are a welcome advance in the law. But it leads me to wonder whether the power sought under Clause 2 is confined to structured settlements or can be applied, as the provision seems to suggest, to damages in a finite sum in the conventional sense. If a finite sum of damages accrues interest and periodical payments are ordered by consent, questions will arise as to who should hold the remaining sums and whether, and at whose expense, tax is attracted. A further question on Clause 2 is whether periodical payment orders are expected to be variable or the order will allow for variation as to either rate or duration if that is thought appropriate by the parties. I believe that that has been deliberately omitted from the Bill. I simply question the thinking behind that omission. Having said that, one recognises in the passage of this Bill the risk of over-complication of damages awards as a result of trying to compensate too precisely.

I turn briefly to the other provisions of the Bill. Clause 3 is a welcome, commonsense provision. I believe that it needs little consideration by your Lordships' House. Clause 4 is also welcome. It gives further recognition to the structured settlement. As I understand it, Clause 6 puts on a statutory footing the assurances that are now normally given by the appropriate Minister in public sector settlements. The only question I raise relates to Clause 6(5), which provides:
"A guarantee under this section shall be given on such terms as the Minister concerned may determine".
What terms are envisaged in the provision of such a guarantee? An early revelation of what lies behind that subsection would be welcome.

With those observations, I join in welcoming this Bill.

3.55 p.m.

My Lords, your Lordships will note that Clause 8 subsection (2) provides that Clause 3 does not extend to Scotland. Clause 3 deals with provisional damages in fatal accident claims. That seems to me to be a very important factor. I apologise to my noble and learned friend the Lord Chancellor that I have not notified him of this question in advance. I am rather intrigued as to why Clause 3 of this important Bill does not apply to Scotland.

3.56 p.m.

My Lords, I deal first with the last question. My understanding is that the present law of Scotland accords with the provision in this Bill. When I addressed your Lordships at the outset I said that it was very similar to the position that already existed in Scotland and no corresponding clarification of Scots law was needed. I hope that that satisfactorily answers the noble Earl's short question.

I turn to the other matters that have been raised. I believe that the most important point relates to the power in Clause 1. At present, my intention is to await the Court of Appeal decisions before I come to a conclusion upon this matter. Your Lordships will appreciate that this is a delicate area. The damages awarded will relate to an incident that has taken place in the past, and very often to cover that has been arranged in the past. It is one thing for courts to make decisions which are retrospective, which courts nearly always do. Most of the jurisdiction of the courts is in respect of matters that have happened, and they make decisions which have effect in the past. Very often, the decision is based only on what has taken place in the past. There are other types of jurisdiction; for example, the answering of questions, which are not hypothetical, as to the meaning of documents. There is a danger of interference with existing situations if the exercise of the power in Clause 1 produces something different from what the court regards as right in the circumstances of the case. The clause intends to confer power on the Lord Chancellor to determine the right rate in the generality of cases on the basis of the law as it has developed. What the Court of Appeal may have to say in relation to the cases that are presently before it will be extremely helpful in determining the correct approach to that matter.

It has been said that the further the Clause 3 exception extends, the more difficult it is to achieve certainty. On the other hand, there is a great variety of cases. I do not believe that it is wise to restrict too much the exceptions. This is a matter that we shall discuss in Committee in view of the promise that the noble Lord, Lord Irvine of Lairg, has made to table suitable amendments. I emphasise the character of the amendments that have been promised. The situation is difficult and we shall have a chance to discuss it. As the noble Lord, Lord Meston, said, it is, in a sense, gazing into a crystal ball because it is in the nature of a forecast. The Lord Chancellor, given this power, is attempting to help the courts to make that forecast. That is a difficult operation.

As regards consultation, I certainly intend to consult widely about the matter. Your Lordships will see the list of people whom the Law Commission consulted. Many of them will have an interest in helping the Lord Chancellor to come to the right answer on this matter.

The noble Lord, Lord Meston, referred to family lawyers being in the lead of this area of development. Unfortunately, the Bill will not be likely to give them direct help, although it may give them some kind of indirect help. We have tried to help them more directly in recent times. The date on which I would expect to exercise this power would be after the Court of Appeal has discussed the cases which are presently before it.

The only other matter that I need to mention is the terms of the guarantee in relation to Clause 6. Those are matters for discussion in relation to the particular circumstances of the case. We are concerned to give undoubted power to the Secretary of State to make such guarantees. That is the issue that has been raised so far. There may be a question about whether a Secretary of State has power to give a guarantee. The whole issue is consensual, as has been pointed out by myself and others. It is not a power in the court to force such a structured settlement on the parties; the parties must agree to it. The guarantee will be part of that agreement and the terms will be as are determined between the guarantor and the two parties to the original agreement.

I am grateful for the welcome that the Bill has been given. It is an important Bill and I hope that your Lordships will be able to give it adequate scrutiny at the same time as giving it a reasonably speedy passage. I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

Channel Tunnel Rail Link Bill

Brought from the Commons; read a first time, and referred to the Examiners. Bill ordered to be printed.

Housing Grants, Construction And Regeneration Bill Hl

4.3 p.m.

Read a third time.

Clause 1 [ Grants for improvements and repairs, &c.]:

moved Amendment No. 1:

Page 2, line 16, leave out ("these") and insert ("the above").

The noble Lord said: My Lords, Amendment No. 1 follows the amendment which was introduced in Committee to deal with the vital issue of grants to assist mainly elderly persons on low income to have their homes improved by insulation and other means. The process by which that has been built up over the years has been regarded as very successful and has received continuing support from the Government. As explained in Committee, in the Finance Bill which preceded the latest Finance Bill the Government committed themselves to provide £100 million per annum for three years for the support of this important humanitarian and advantageous venture.

However, suddenly in the latest Finance Bill the Government decided to reduce the contribution by one-third, although the commitment had been made for three years. That will mean that approximately 200,000 houses, which would otherwise have been improved with beneficial effects for their occupants, will not now be improved. Furthermore, several thousand people who would have been employed in carrying out that work will no longer be so employed. The noble Earl, Lord Ferrers, queried the figure of 200,000 and I undertook that the NEA, which carries out such work, would write to him to explain how that figure had been arrived at. It has done so.

Now is the moment when the Government can think again about the matter. They achieved great acclaim when they decided to make £100 million available and committed themselves to continuing to do so for the ensuing two years. The sudden reduction in that has created doubts about the Government's ongoing support for this important venture. I hope that at this late stage in the Bill the Government will give an indication that they will think again. I beg to move.

My Lords, before the noble Lord sits down, am I right in believing that he is speaking also to Amendments Nos. 2 and 15, which are material to the point that he is making, or is he abandoning the group that has been published?

My Lords, I should have made clear that I am speaking also to Amendments Nos. 2 and 15.

My Lords, I am delighted to support my noble friend in moving the amendment, and in particular in speaking to Amendment No. 15. I urged him to take precedence in speaking because energy efficiency and home improvements are matters about which my noble friend speaks not only with knowledge and understanding but also from the heart.

I had thought of the Government as priding themselves in being a government of good housekeeping. I was astounded when I discovered the reduction in the budget, given that spending on home energy efficiency appears to be such a good measure of economy as well as producing beneficial effects for individual householders.

I support the amendment not only for its intrinsic worth but because it is typical of some of the points which have arisen in respect of the Bill. It is a Bill of many parts and much of it is concerned with home improvements and renovation. However, I fear that other parts are a screen for the reduction in spending on home improvements and renovation. I believe that the amendment is appropriate and that it is appropriate to press the Government on their proposals.

Perhaps with the leave of the House, I may apologise for having to leave the Chamber soon. I should be chairing a conference and I have left a jobsharer doing so. However, I felt that it was important to support my noble friend today and, despite what I said about the Bill, to wish it well.

My Lords, neither the noble Lord, Lord Ezra, nor the noble Baroness, Lady Hamwee, adverted to the contents of Amendment No. 15. There your Lordships will see a proposal to insert on page 80 at line 31 the words:

"The Secretary of State shall ensure that the resources available to fund grants under section 15 of the Social Security Act 1990 are at least equal to £100 million annually until the end of the financial year 1997–98".
Those are words sufficiently unusual to find on a Marshalled List that I tried to satisfy myself why they should be so. Your Lordships will be aware that this House has no power to raise taxes. Therefore, it is generally thought inappropriate for it to lay down what precise sums out of taxation shall be devoted to any particular project.

More particularly, your Lordships will recall that before we conclude our proceedings this afternoon, we shall be blithely agreeing to the privilege amendment. I remind your Lordships what the amendment says because it has moved so often that nobody listens to the wording. It states:
"Nothing in this Act shall impose any charge on the people or on public funds, or vary the amount or incidence or otherwise alter any such charge in any manner, or affect the assessment, levying, administration or application of any money raised by any such charge".
The effect of the amendment will be wholly to wipe out the effect of Amendment No. 15 as proposed. Of course, the privilege amendment is a formality and protects the privileges of the House of Commons. It is up to the other place whether or not it wipes out this amendment with that amendment. But it is worth reminding the House that it is not our function to quantify any vote in any budget. Therefore, while I accept that this is an appropriate occasion for the noble Lord and the noble Baroness to ventilate their feelings on a policy which they feel is not being sufficiently carried out, I hope that your Lordships will not go so far as to accept any of the amendments.

My Lords, the House will be grateful to the noble Lord, Lord Ezra, for moving this amendment and for speaking to Amendment No. 2. I share the doubts expressed by the noble Lord, Lord Elton, in relation to Amendment No. 15; and from these Benches, I should not like to put a figure on any amendment moved by your Lordships. Nevertheless, the point is important and should be discussed, even at this late stage. The reason that it is discussed at this late stage is because the provision comes at a late stage of the Bill. Therefore, in our debates both in Committee and on Report, we have not given sufficient attention to the issues raised by what is proposed in Clause 138.

We should have the home energy efficiency scheme quite firmly in our minds. It provides insulation grants for the over-60s and people on benefits. It is worth pointing out that since the Government announced that eligibility for the elderly will be reduced as from last April, the number of applications has soared.

My honourable friend in another place, Ms. Ruddock, has tabled a number of Questions for Written Answer which have elicited a response from the Government which is perfectly clear; namely, that that is perceived to be a valuable initiative for those who are elderly and on benefit. The Government say that the scheme is intended to help 600,000 people this year; but, according to our information, more than 530,000 applications have already been received. There is still time for the Government to take a different view on this. I very much hope that they will do so before the matter is pursued in another place, which no doubt it will be, under the terms which the noble Lord, Lord Elton, quite rightly pointed out to your Lordships.

It is unfortunate that the way in which the clause is drafted spreads the grants for home energy efficiency wider than they were before while reducing in budgetary terms the quantum. That simply means that fewer people will benefit from what is the fundamental objective of the scheme; namely, to relieve the poorest households which are under-heated either because the combination of poor insulation and inadequate heating makes it impossible to achieve an acceptable standard or because householders switch off or turn down their heating to ensure that fuel bills remain affordable.

I am informed that research conducted by the Building Research Establishment confirms that 77 per cent. of the current HEES measures are taken up in improved comfort and 23 per cent. in fuel bill savings. That is a desirable objective of any government of whichever party.

Again, I recognise what the noble Lord, Lord Elton, said. Indeed, he will find that my name is not attached to Amendment No. 15 because I do not believe in pre-judging any financial issue before it goes to another place. I think that is right and proper. But I believe that the principle is right. The Government should think again about the home energy efficiency scheme, which has after all proved extremely valuable. We should be sure that it is directed to those who are specifically in need. If it works—and the number of applications shows that it is working—it will result in substantial fuel bill savings which can only be good for the environment.

4.15 p.m.

My Lords, in speaking to this group of amendments, I wish to raise two specific issues. The first is in relation to the privilege amendment and the constitutional issue which the noble Lord, Lord Elton, mentioned. My understanding is that the other place guards jealously, quite rightly, its sole powers to raise money for the public purse and effectively to levy taxation on the British people. No Member of your Lordships' House would quarrel with that power which should not be trammelled. It is only right that that should exist.

However, we must make a distinction between raising taxes and spending public money. In that situation, I make a distinction and say that we are talking about spending public money. That is quite a legitimate area of concern for your Lordships' House. If we did not have that ability, we should not be able to entertain, for example, any amendment to the Asylum and Immigration Bill which is before your Lordships' House which would require the repayment of child benefit to asylum seekers of the right age category.

My Lords, I remind the noble Lord of the few words which I imagine he is about to agree to. The privilege amendment starts:

"Nothing in this Act shall impose any charge",
and so on. The last few words are:
"or affect … the administration or application of any money raised by any such charge".
Therefore, it all falls within the same matter. It is one thing to make decisions about what should be done, but it is something else to say how much money should be spent doing it. It is the latter to which I object.

My Lords, I hear what the noble Lord says. I still believe that it is a grey area which may be worthy of consideration.

In fact, that leads me to the next point that I was going to make—that is, that on the one side, this group of amendments deals with the spending of a certain amount of public money in terms of home insulation grants for elderly and poor people. When we are considering that issue, we need to consider also the issue of cold weather payments. I have a direct question for the Government in relation to that. What length of time of cold weather payments would be required to show a positive advantage by passing this amendment? I ask that because, on the one hand, we are talking about spending a certain amount of public money to provide insulation for the homes of elderly people; while, on the other hand, if there are periods of cold weather, the Government are required to provide financial assistance to elderly and poor people who suffer the hardship of extra heating bills. Therefore, it is a contribution to the heating bills.

However, if those heating bills are effectively saved by the expenditure of the proposed £100 million of public money, it is possible that, over a period of time, that money will be saved by the Exchequer because of the reduction in cold weather payments that the Government have to make. I have not given the Minister notice that I would ask that question, but it would be most interesting to have an answer while debating this series of amendments.

My Lords, all sides of the House are united in their support of the home energy efficiency scheme. Our disagreements seem to centre on the quantum—that is, the amount of money that we should be giving to support the scheme. Indeed, that is very much the subject of Amendment No. 15.

We are committed to providing as much help as possible to the most vulnerable people in society—those who have the greatest difficulty in affording to keep warm enough and are least able to improve the energy standard of their homes. That is why the scheme is open only to people who are on low incomes, people who receive various disability allowances and people aged 60 or over.

I understand the desire to keep the value of grants paid under this successful and well-regarded scheme at their historic peak. It is always hard to have to reduce the allocation to any programme, though two factors were particularly relevant to the scheme. One is that last year's big increase was intended to offset the projected higher rate of VAT on fuel which did not, in the event, take place. The other is that the full rate of grant has now been restricted to the least well off.

We have changed the rules so that better-off older householders now pay a contribution towards the cost of the insulation work available. Looking ahead, most of the allocation will be spent on insulating the homes of the poorest families. I am sure that noble Lords welcome that substantial improvement to the focus of the scheme.

The noble Lord, Lord Williams of Elvel, mentioned the figure of 530,000 grants having already been made this year. That is not a figure that we recognise; indeed, 310,000 is the figure that I have on the paperwork in front of me. However, I should be happy to be better informed shortly by the noble Lord. If there is a fundamental disagreement in the figures, I shall be happy to write to the noble Lord on the matter. We have seen a surge of interest from better-off people—

My Lords, I am sorry to interrupt the Minister and I hope that he will forgive me for doing so. However, I referred to over 530,000 applications rather than grants.

Yes, my Lords. As I said, 310,000 is the figure that I have. There may indeed be some confusion as to whether my figure has been calculated on exactly the same basis as that of the noble Lord. However, there has been a surge of interest from better-off people aged over 60 seeking to register before the rules changed. Fairness requires us to honour all applications received before the deadline under the old rules. Our managing agents are handling the situation extremely well. The backlog will be efficiently tackled and we will ensure that allocations are adjusted where appropriate to deal with localised anomalies. Before next winter waiting times should have returned to their normal commendable levels of about four weeks. Any change brings transitional effects and the home energy efficiency scheme is no exception.

The noble Lord, Lord Ezra, suggested that we have not honoured a commitment to maintain the level of funding for three years. That is not the case. Statements made last year, when the allocation was increased, simply made it clear that the planning baseline for the public expenditure survey period was being changed.

There can never be any guarantee that the planned level of expenditure will not change. In fact the amount of money allocated to the home energy efficiency scheme has changed each year. Sometimes it has been possible to find more towards the year-end, so that actual expenditure exceeded the figure published in the public expenditure survey. It would be extraordinary to have funding commitments enshrined in primary legislation. Indeed, it would become quite impossible for any government to deal with changed circumstances or different priorities. Expenditure planning and decisions about individual programmes have to be separate from the powers which make them possible.

I very much appreciate the sentiments behind the amendments and the support which the noble Lord wishes to evidence for such a successful and thoroughly commendable scheme. However, I hope that he will feel able to withdraw the amendments. If he does not, I urge the House to reject them. I see that the noble Lord, Lord Monkswell, is about to rise to his feet. I must tell him that I do not have an answer to his question today. Nevertheless, I shall write to him on the matter.

My Lords, I thank the Minister for the sympathetic way in which he has spoken about the home energy efficiency scheme and the great benefits over the years which it has brought to people on low incomes, especially the elderly. The noble Lord, Lord Williams, referred to the great increase in the demand for such services from people in that category as soon as it was known that the amount of funding would be reduced with effect from April. I must say that the information that I have confirms the figure mentioned by the noble Lord, Lord Williams. That is evidence of the great need for the scheme.

In the early years, the demand was very patchy because people did not know about the scheme; indeed, they did not know about the benefits that they could receive from it. As the Minister said, the scheme is now very successful. However, what worries me and my colleagues on this side of the House are the mixed messages which the changes in government policy have created. The commitment—and it was certainly regarded as such at the time—to make £100 million available for three years was regarded as a very welcome, humanitarian and energy-efficient measure. The fact that it was so quickly changed altered the signal and has confused people.

The way in which the amendment has been introduced, despite the quite proper reservation expressed by the noble Lord, Lord Elton, is, nonetheless, a way of bringing the matter home; in other words, a way to make it quite clear that the situation is most unfortunate. Having taken a very positive step, the Government have now confused the issue by the change which they so quickly made.

In my view this is one of the most important ways in which we can deal with the energy problem. People need assistance and they need to have stimulus. The mere fact of putting taxes on energy consumers in the domestic sector, as the argument about VAT demonstrated, is not the way to set about it. A combination of stimulus and assistance to those on low incomes seems to me to be absolutely the right way to proceed. Indeed, I thought that the Government had committed themselves to that path. The amendment was introduced today in order to bring them back to that positive, virtuous path. The issue is of such importance that I believe it necessary to ask the House for its opinion.

4.28 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 20; Not-Contents, 114.

Division No. 1

CONTENTS

Addington, L.Howie of Troon, L.
Annan, L.Jenkins of Hillhead, L.
Beaumont of Whitley, L.McGregor of Durris, L.
Brain, LMcNair, L.
Donaldson of Kingsbridge, L.Meston, L.
Elis-Thomas, L.Redesdale, L.
Ezra, L. [Teller.]Sainsbury, L.
Grey, E.Saltoun of Abernethy, Ly
Hamwee, B. [Teller.]Thomson of Monifieth, L
Harris of Greenwich, L.Wallace of Saltaire, L.

NOT-CONTENTS

Aberdare, L.Inglewood, L.
Addison, V.Ingrow, L.
Alexander of Tunis, E.Jenkin of Roding, L.
Allenby of Megiddo, V.Johnston of Rockport, L.
Archer of Weston-Super-Mare, L.Lane of Horsell, L.
Ashbourne, L.Lauderdale, E.
Astor of Hever, L.Lawrence, L.
Balfour, E.Liverpool, E.
Barber of Tewkesbury, L.Long, V. [Teller.]
Belhaven and Stenton, L.Lucas, L.
Bethell, L.McColl of Dulwich, L.
Blatch, B.McConnell, L.
Blyth, L.Mackay of Ardbrecknish, L.
Boardman, L.Mackay of Clashfern, L. [Lord Chancellor.]
Bowness, L.
Boyd-Carpenter, L.Mackay of Drumadoon, L.
Brabazon of Tara, L.Merrivale, L.
Bridgeman, V.Mersey, V.
Brigstocke, B.Middleton, L.
Brougham and Vaux, L.Miller of Hendon, B.
Buckinghamshire, E.Montgomery of Alamein, V.
Butterworth, L.Mowbray and Stourton, L.
Cadman, L.Munster, E.
Campbell of Alloway, L.Murton of Lindisfarne, L.
Campbell of Croy, L.Newall, L.
Carnegy of Lour, B.Oppenheim-Barnes, B.
Carnock, L.Orkney, E.
Chalker of Wallasey, B.Oxfuird, V.
Chelmer, L.Park of Monmouth, B.
Chelmsford, V.Pearson of Rannoch, L.
Chesham, L. [Teller.]Peyton of Yeovil, L.
Clanwilliam, E.Pilkington of Oxenford, L.
Courtown, E.
Cranborne, V. [Lord Privy Seal.]Rankeillour, L.
Crickhowell, L.Rawlings, B.
Darcy (de Knayth), B.Reay, L.
De Freyne, L.Renwick, L.
Dean of Harptree, L.Romney, E.
Dixon-Smith, L.Sandys, L.
Dundonald, E.Seccombe, B.
Ellenborough, L.Sharples, B.
Elles, B.Shaw of Northstead, L.
Elliott of Morpeth, L.Strathcarron, L.
Elton, L.Strathclyde, L.
Finsberg, L.Sudeley, L.
Fraser of Kilmorack, L.Swinfen, L.
Gardner of Parkes, B.Teviot, L.
Geddes, L.Thomas of Gwydir, L.
Goschen, V.Trefgarne, L.
Gray of Contin, L.Trumpington, B.
Halsbury, E.Tugendhat, L.
Harding of Petherton, L.Ullswater, V.
Harmsworth, L.Vivian, L.
Harrowby, E.Wade of Chorlton, L.
Holderness, L.Weatherill, L.
HolmPatrick, L.Whitelaw, V.
Howe, E.Wilcox, B.
Ilnchester, E.Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

4.37 p.m.

[ Amendment No.2 not moved.]

Clause 36 [ Delayed payment of mandatory grant]:

The noble Lord said: My Lords, in moving Amendment No. 3, I wish to speak also to Amendment No. 4, which is consequential. At Report stage the Government indicated that Clause 36 was designed to assist local authorities with the management of their cash flows and finances. However, there is no evidence that local authorities have requested this provision to defer payments. My noble friend Lord Lucas advised the House that if local authorities had no wish for this 12 month deferral of payment, they had not told him. However, the Department of the Environment should be aware of the response to the initial consultation document as regards the Association of Metropolitan Authorities and the Association of District Councils. It is obvious from that response that they see major problems with Clause 36 and do not support it.

My noble friend felt that the proposals in this clause would not result in great inconvenience for contractors. Again, this is not the view of the local authority organisations, nor, I suspect, contractors—in particular, small builders. As many payments for disabled facilities grants are made to contractors in instalments, work is unlikely to start until the date the local authority has agreed for payment. Contractors will be reticent to start work early and wait for payment, as the Government suggest they may. Contractors are businesses with cash flows and financial management to consider. In reality, they are likely to wait until the money is there before doing the work. They may wish to re-estimate the costs because of the delay between the original estimate and the works commencing.

If works do not begin until 12 months after the date of application, it is possible that the disabled occupant's needs may have increased if the occupant has been living in inappropriate or possibly unsafe accommodation for such a long time. The Government wish to make clear in guidance the circumstances in which the deferment may be used. This, however, will be extremely difficult to specify. Decisions about financial management can be very complex and involve numerous factors. Trying to specify within guidance in which particular cash flow situations the deferment may be used could lead to disputes between disabled people and the local authority concerning interpretation of the guidance and the exact financial position. That is surely something to be avoided.

As stated by several participants in the debate at Committee and Report stages, the proposals would cause more than just inconvenience for disabled people. They would add to the already considerable wait for disabled facilities grants and could not only limit the independence of disabled people but also increase the costs of care and possibly vastly increase residential or hospital care costs for those awaiting adaptations before they return home.

Last Wednesday, the Association of Metropolitan Authorities combined with the ADC faxed a letter to the Department of the Environment, a copy of which I have here. I had asked that they should contact my noble friend directly; but unfortunately they have sent the fax to one of his officials. I have authority to quote from the letter. I shall not read it all but merely the relevant parts:

"The Associations' response to the explanatory paper, 'The Future of Private Housing Renewal Programmes in England', was compiled on the basis of consultation with our member authorities … further discussions with the Associations' advisers and parliamentary debate of the Bill, have not caused us to change our position, and the Associations' view therefore remains as originally stated".

The associations again quote the original view which was in their submission. The letter continues:

"The introduction of deferral of claims for payment of disabled facilities grant for a period of twelve months from the date of application might resolve some of the immediate difficulties, but it will cause other problems. On completion of the work, the contractor will quite rightly expect to be paid and any delays in payment will cause financial problems for contractors who may then not be prepared to carry out disabled facilities grant work. Alternatively, the hopes and expectations of the disabled person will have been raised with the approval of the grant for work, but the contractor may not be prepared to start until towards the end of the twelve month period and may then demand a premium or refuse to do the work if prices have risen.
"Additionally, the proposal may result in a council committing itself to future expenditure it does not know it can meet as the resource position in future years will not be clear when a deferred payment is contemplated".

I hope that my noble friend will be able to see at least some merit in the amendment and will agree to it. If he cannot do so today, I hope that he will say that the relevant action will be taken on it in another place. It is quite obvious that the local authorities do not want the benefit of the clause that I seek to remove. I beg to move.

My Lords, I support the amendment. I thought that others would intervene. First, I congratulate the noble Lord, Lord Swinfen, on his persistence in pursuing the issue. I regret that on previous occasions when the amendment was moved I was already making for home; but today I wish to give it my warm if brief support. It seems that the balance of inconvenience is tilted strongly in favour of the local authority; "inconvenience" is a euphemism where the disabled person is concerned. As we have heard, the 12-month delay may cause real problems for the small builder. We are told that the local authorities do not want the 12-month limit so it seems daft and unnecessary. I hope that the Minister heard from the local authorities and that when the noble Lord, Lord Swinfen, read out the fax from the AMA to his official was not the first time that he heard of it. I hope he will be able to accept the amendment or take it away, as the noble Lord, Lord Swinfen, suggested, and that the Government will bring in an amendment in the other place.

The Minister has shown himself willing to listen and respond positively to many of the amendments proposed by the noble Lord, Lord Swinfen. I am grateful for that and hope that he will do the same with this one for which noble Lords on all sides of the House have argued so consistently and so persuasively.

4.45 p.m.

My Lords, I support the amendment. I spoke at some length at previous stages of the Bill in support of the principle that the noble Lord, Lord Swinfen, enunciated, so I need not speak at length today.

One question which comes to my mind is whether the Government envisage that the clause will be permissive or restrictive. Because of the difficulties local authorities had with the previous grant regime, one of the ways in which they sought to deal with it was to institute a system of waiting lists. That meant that mandatory grants were paid in order of the applicant's arrival on the waiting list and that was the mechanism by which grant payments were delayed. Does the Minister envisage that the operation of the clause will effectively mean that local authorities will be prevented from delaying payment beyond the 12-month period? Alternatively, is the clause permissive, enabling local authorities to set a payment date at some shorter period than 12 months?

The power that the Secretary of State is granting himself to institute some period other than 12 months fills us with concern and it might be worth while the Minister addressing the point in his remarks today. I seem to remember that he tried to address it before, but it will do no harm for him to repeat it. I warmly support the amendment.

My Lords, I must admit that I am often puzzled by the purport or intention of legislation but this provision totally baffled me. I should be glad to hear the Minister's explanation. It seems to me that Clause 23 is welcome and the Government are to be congratulated on putting it forward. However, at the same time they propose Clause 36 in a grudging way, using the phrase,

"Where the local housing authority are obliged to approve",
then it may do something to draw the grant back and withhold it. That seems to take the motivation away from Clause 23. It also shows a wish to maximise the irritation and anxiety of recipients and local authorities, at the same time as minimising any savings that might have come from it. I am puzzled. I should not have thought that the Government could lose by acceding to the amendment. They would gain a great deal in terms of the welcome given by disabled people to the provisions.

My Lords, I wish to support the amendment of the noble Lord, Lord Swinfen. As my noble friend Lord Murray said, it seems odd that the Government appear to accede to the requirement that there should be mandatory grants for disabled facilities, yet at the same time they are prepared to admit into the Bill a clause which gives them grants on terms of payment which may be extended not merely by 12 months but by,

"such other period as may be specified by order of the Secretary of State".
In other words, so far as I understand it, the payment can be indefinitely postponed. Unless the Government can give us satisfaction, I hope that they will accept the noble Lord's amendment.

My Lords, having listened carefully to the views expressed, I share the opinions of the noble Lord, Lord Williams. On the one hand, the Government accept that special aid should be given to people who are disabled; later in the Bill that is clouded by uncertainty. The situation needs clarification.

My Lords, it was made clear both in Committee and at Report stage that we share the concerns of noble Lords about the use of Clause 36. I explained that mandatory grants restrict local authorities' ability to maintain control over their resources, and that our purpose in bringing forward Clause 36 was to strike a sensible balance between the needs of the disabled person and the requirement of a local authority to operate within an annual financial budget. I said that we envisaged that the provision would be used only in exceptional circumstances.

My noble friend has told the House that the local authority associations do not see a need for Clause 36 and that local authorities will not use the power set out in the clause. That is good news as it is our intention that the provision should not be widely used.

My noble friend maintains that if we are seeking to help local authorities, we are under a misconception because they do not want the help we are offering. However, it is the duty of Government to look beyond what some say they want today and consider what they might need tomorrow.

I have to say that I interpret the signals in a different way. When the department published its paper in June last year explaining the proposed changes to the private sector renewal regime, local authorities and interested parties had the opportunity to comment. We received 283 responses, the majority of which were from local authorities. Of those, only 72 expressed concern about the proposal to allow local authorities to defer payment of mandatory disabled facilities grants.

As noble Lords would expect, the majority of concern centred on the needs of the disabled person and not on the principle of a deferred payment. The joint response from the Association of Metropolitan Authorities and Association of District Councils initially suggested that one option could be to extend the period in which a local authority has to approve a grant from six to 12 months. They were clearly conscious of the financial squeeze that they might be under. They preferred to give themselves a general permission to take 12 months to approve an application. We felt that certainty for the disabled person was preferable, that a tighter rein was preferable, and that is why Clause 36 is in the Bill rather than the more extensive proposals which were in the AMA's and the ADC's original response. Indeed, my noble friend did not read out part of the letter from the AMA. In referring to its review, it stated:
"Whilst it is therefore a representative view, it may not necessarily reflect the position of every individual local authority".
We consider that the needs of the disabled person are paramount and believe that as a rule local authorities should approve grant at the earliest possible time, and certainly no later than six months after an application has been submitted. However, our responsibility is to all those who will be obliged to offer mandatory grants and not just to those who have expressed concern. While some local authorities, their representatives and other organisations may believe the provision to be misconceived, it is a matter of fact that, under the provisions for mandatory disabled facilities grant, a local authority may be obliged to pay a grant at a point in the year when to do so would cause considerable financial difficulty.

We are not suggesting that local authorities should be silting up the future year's programmes with commitments. Instead what we are offering is a mechanism that may be used by a local authority if it is facing a particular resource problem, perhaps because of the constraints of the financial year. No one can honestly say that this situation will never arise. Surely it is better to have a system in place where local authorities can confirm that a grant will be available, but in a few months' time, rather than be put in a position where they have to resort to informal delaying tactics, as has been the case in the past.

If local authorities do not want to use the provision, they will not be obliged to do so. I can assure the House that the guidance from the department will discount any suggestion that the provision could be used as a deliberate delaying tactic. We will make clear that the provision is for use in exceptional circumstances and should be used only where a needs assessment of the applicant confirms that a delay would not be prejudicial to the applicant's long-term health.

My noble friend Lord Swinfen asked about the impact of delayed payment on builders. Our proposal deals with the payment of grant between the applicant and the local authority; that is one relationship. Another relationship is between the grant applicant and the builder. Nothing in Clause 36 suggests that the builder need undertake works in advance of the applicant's ability to pay. Any builder who has tendered for grant-assisted works will know that a guaranteed payment will be made by the local authority at some point so long as the work is done well. It is for the contractor to weigh up that benefit against the possible delay in either commencing the works or being paid, should he decide to commence the works before the agreed payment date specified by the local authority when it approved the grant.

Should a contractor demand a premium if he has to start work later and thereby incurs increased costs, a local authority will have the power to redetermine the grant amount when the works commence.

The noble Lord, Lord Monkswell, asked whether local authorities will be able to operate waiting lists, as they do at present. Yes, there is obviously the ability for local authorities to operate waiting lists. But that is within the constraints of the time limits in the Bill: six months to determine an application; and 12 months maximum to pay. Within those limits there is a permissive power to operate waiting lists and we shall be giving guidance on that subject.

We have no intention of changing the 12-month limit. It is there to enable us to adapt the Bill to experience. But there is no short-term intention, and we have no feeling that 12 months is anything but the right period at present.

We consider that Clause 36 is a sensible provision which should be available to authorities as a last resort and which need not cause applicants to face unreasonable hardship. I understand my noble friend's concern, and I hope that he can understand why we cannot accept his amendments. I trust that he will feel able to withdraw the amendment, albeit with a slightly heavy heart.

My Lords, that seems to have been a far tougher response to this group of amendments than my noble friend gave on either of the two previous occasions. I find that somewhat surprising.

By leaving Clause 36 in the Bill, it gives me the impression that mandatory disabled facilities grants are being emasculated, which is not to be desired. My noble friend said that only 72 of the local authorities expressed concern at the provision. He will also have noted from the letter from which he, too, quoted that only a minority of the local authorities dealt with the matter in their submissions. Therefore, it does not mean that only 72 were concerned about the issue. Only 72 dealt with that specific matter.

My noble friend states that there is no need for the work to be undertaken by a builder before the applicant is able to pay; and that if there were a premium, or the costs of the work increased, the local authority could redetermine the amount of the grant. That in itself, I assume, could start the whole delaying process of 12 months all over again. I do not find that a satisfactory position. However, I have seen the size of the Government's majority on the recent Division. The noble Lord, Lord Williams, indicates that the Opposition did not vote, but there was a paucity of Members on the Benches of the official Opposition. I believe that this matter will be taken up again in another place. If I now call a Division and lose, my right honourable friends in another place will cite that as an excuse: that the House of Lords disagreed with the amendment.

So I feel that it would be wiser for me to withdraw the amendment and allow someone else in the other place to fight on another occasion. As my noble friend said, it is certainly with a heavy heart that I do so. But I believe that it is the wisest course at the moment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 37 [ Payment of grants: conditions as to carrying out of the works]:

[ Amendment No. 4 not moved.]

5 p.m.

Clause 103 [ Construction contracts]:

moved Amendment No. 5:

Page 58, line 10, leave out from ("capacity") to end of line 11.

The noble Lord said: My Lords, in the course of the discussions at Report stage on Part II of the Bill, to which we have now moved, the noble Lord, Lord Lucas, said that I would discover as the debate progressed things happening beneath the surface—as he put it—for which I would be grateful but which had not yet poked their heads above the surface in the form of amendments. I was grateful for that.

I had hoped that one or two of those things happening beneath the surface would have poked their noses just above the surface by the time of Third Reading. None of them has. That is why my amendments have been tabled. I speak generally at the moment. I shall come to the particular amendment, Amendment No. 5, as soon as I can.

I tabled a series of amendments, most but not all of which refer to undertakings or half-undertakings and to nods or winks that we received from the Minister in the course of the debate. He followed up those undertakings or semi-undertakings with letters in which he spoke about the Government's position and what their possible attitude to our activities was likely to be. My amendments asked the Government to put in the Official Report their views on these amendments—which were discussed at great length at Report stage and which we shall not discuss at great length again today—so that they will be on the public record.

Amendment No. 5 was discussed fully and I do not need to go into it in detail. It removes from Clause 103 the exemption for the Duchy of Lancaster or the Duchy of Cornwall from the provisions of the Bill. In the course of the debate, the noble Lord, Lord Lucas, was reasonably welcoming ( Hansard, 22nd April at column 916), though he said that he could not be more helpful at that moment. But he welcomed the amendment, which was the same amendment that I have now tabled.

That amendment has been brought forward in order to ask him how far that welcome has gone. It has not gone so far as to bring out an amendment from the Government today. I wonder whether he will give an undertaking that the Government will bring forward an amendment when the Bill goes to another place. I beg to move.

My Lords, as I said in response to the noble Lord, Lord Williams of Elvel, who moved the same amendment on Report, this is a matter on which we shall reflect. I am sure your Lordships will appreciate that I can say no more about this particular matter at present.

My Lords, I wonder whether I am grateful to the Minister. At least he did not say no—the noble Baroness rightly says that he did not say yes either—but on the other hand, he did not say "no, but maybe". I am a little disappointed. He said that he has to reflect and I agree with him. The waters in which we splash are deep and important.

However, the Minister has had a whole week to reflect about the matter and he will have another week before the Bill reaches Second Reading in another place. Will he perhaps be able to accelerate his reflection, so that he might come to some conclusion, if not before Second Reading in another place then at least before Third Reading. He nods his head and I am grateful for that. On that nod, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 104 [Meaning of "construction operations"]:

moved Amendment No. 6:

Page 58, line 17, leave out from ("land") to end of line 22.

The noble Lord said: My Lords, this is not an amendment which we have discussed before and is one on which I merely ask for assurances or reassurance. It arises from the several quite lengthy and detailed debates that we had on the definition of "construction operations" at various stages of the Bill. The Government stuck to their last, although we had offered a variety of improvements or clarifications, and the definition remains more or less as it started out.

However, in the course of the debate at Report stage, the Minister described my proposals as "ingenious additions" to this Part of the Bill. I do not think that they were ingenious. They were straightforward, clear and simple—simple-minded even. The Government did not accept them. But in his reply the Minister made what I thought was a quite significant remark. He said:

"The 'construction' in Clause 103(i)(b) [now Clause 104] is a generality, which is,
'works forming, or to form, part of the land".—[Official Report, 2214/96; col. 921.]

That is true. That is a generality. The Minister went on to say that the rest of that paragraph was "a selection of illustrations".

It struck me that, if that were true, what I had sought to do in my "ingenious" amendments had been to add to that number of illustrations—no more than that. As the Minister rightly said, there were many illustrations which could be included. The question struck me later in the debate—I mentioned it in passing: if those were no more than illustrations, why were they needed at all?

The Bill mentions "buildings or structures", which seems to me to be a perfectly adequate description of what construction means. I am fortified in my belief by the thought that in the Environment Bill which was passed more than a year ago, it was thought sufficient to refer in that Bill merely to "buildings and structures" without any illustrations of what buildings and structures might be. The draftsman of that Bill probably thought that most people would recognise a building or structure if it fell on them or even if it stood up on site, so that illustrations were not necessary.

The question then occurred to me that, if the illustrations could not be extended in the way I had suggested or, even further than that, in the manner in which the Minister hypothetically suggested, although he did not obviously want that, then why have them in at all? I believe that in this Bill the generality is a sufficient definition of those elements of construction to which the Bill should apply. I beg to move.

My Lords, I support the amendment of the noble Lord, Lord Howie of Troon. I too was reading col. 921 of the Report stage of the Bill and my attention was drawn to the frequent use of the word "land". I began to ask myself what that word means in this context.

If one compares subsections (1)(a) and (1)(b) of Clause 104, one sees that (a) refers to "buildings or structures" and (b) refers to "land". There are not as many definitions under (a), as the noble Lord, Lord Howie of Troon, said, as there are under (b). Paragraphs (c), (d), (e) and (f) are really incidentals; that is, they are doing things to what has already been described.

Do we assume that anything that is not a building or a structure is land? The definition appears to include things that happen in the sea, so perhaps parts of the sea are "land" under this definition. It certainly includes tunnels and I suppose tunnels go through land as well as under the sea. Is "land" landscape? Is it land compared with water? Is it our "green and pleasant land" that is subject to any planning restrictions that may come along?

The word "land" should perhaps be changed. Some other generic term might avoid the need for providing six more lines of examples. After re-reading the provision many times I came to the conclusion that it is an odd use of the word "land" in connection with the construction industry.

My Lords, regarding the point raised by the noble Lord, Lord Berkeley, the term,

"forming … part of the land",
is a term of art and a well-established phrase. It is therefore something we feel comfortable in relying upon for what we are describing.

In relation to Amendment No. 6, the noble Lord, Lord Howie, is probably right; that is, we do not need to give examples. However, we find them helpful. They elucidate on the face of the Bill this rather obscure phrase,
"forming … part of the land".
Someone coming fresh to reading the Bill will understand what we are talking about without having to resort to Hansard. We find it a helpful part of the Bill, even though it is not strictly necessary. We would like to keep it in the Bill. I hope therefore that the noble Lord, will withdraw his amendment.

My Lords, once again I am divided between pleasure at the fact that the Minister appears to agree that the part of the Bill I suggest should be left out is not necessary and dismay that he still does not accept the amendment.

When I tabled my ingenious additions to this part of the Bill, the Minister said that they were not necessary. There seems to be a philosophical difference between us. Those things that the Minister thinks are not necessary but are helpful he proposes should be kept in while those things that I think are not necessary but are helpful he considers should be left out. The reason may be that he took the paragraph from the income tax Act 1988 and does not want to tamper with it in case the Chancellor of the Exchequer becomes irritated, or something of that nature.

I raised this matter, not in the hope of persuading the Minister—though he clearly believes I am right—to remove the lines from the Bill; I hoped to impress upon him the dissatisfaction felt not only in this Chamber but throughout the industry with the definition as it stands in relation to construction contracts. I hope that by harping on unreasonably about this matter, even into the Third Reading of the Bill, we will keep the Government's mind open so that in another place they may turn their minds to the many arguments about definitions put before them and come up with a definition of "construction" acceptable not only to us or our colleagues in another place but to the industry as a whole. With those, I hope, not unduly churlish remarks, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 7:

Page 58, line 43, leave out (", or construction of underground works,").

The noble Lord said: My Lords, your Lordships will be pleased to hear that I intend to be brief. We debated this matter at an earlier stage and the comments of the noble Lord, Lord Ezra, were conclusive and incontrovertible. I felt that my remarks added, if not lustre, at least strength to the remarks of the noble Lord. The Minister undertook to think about the amendment, so perhaps he will disclose to us the results of his thinking. I beg to move.

My Lords, we listened very carefully to the noble Lord, Lord Howie of Troon, and also to the noble Lord, Lord Ezra. On Report I explained that our main problem lay in distinguishing between mining and civil engineering operations underground. I also pointed out that no one had been able to suggest how that might be done satisfactorily for the purposes of legislation. Nevertheless, I also said that the Government were not unsympathetic to the thrust of the amendment and that we were prepared to reflect upon it. We are still doing so. This is a difficult area and I am sure the noble Lord appreciates the need to get things right.

In the last few days we have undertaken to introduce a number of adjustments and all this requires a great deal of work. My officials have been hard pressed—not least by the energetic and tenacious way that the noble Lord has pressed his case. I hope at least that the Government have demonstrated an open mind and a readiness to look seriously at everything suggested in this House. However, that is as far as I can go in offering assurance to the noble Lord, Lord Howie. I hope that it is sufficient to enable him to withdraw his amendment.

My Lords, I believe I heard that reply not so long ago. It was virtually the same reply I received in relation to an earlier amendment when the Minister said that he and his hard pressed officials had been reflecting for a week and intended to reflect further. The noble Lord, Lord Ezra, may agree with me that it would be a good idea to call us in and then we could reflect with them, or take over the reflections from them. We would do that without pay.

This is a serious matter. There is no difficulty. The noble Lord, Lord Ezra, when he was chairman of the Coal Board, had no difficulty distinguishing between mining and civil engineering operations under his direction and dealt with them accordingly. I know that the noble Lord, Lord Ezra, is a clever man and would be expected to see things more clearly than many others. But this is not a difficult matter and should be sorted out with a little further reflection. I hope that the Government can sort it out before we reach the stage of passing the Bill. With those thoughts, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 8:

Page 58, line 45, after ("plant") insert ("or").

The noble Lord said: My Lords, Amendment No. 8 is grouped with Amendments Nos. 9 and 10, and I can be brief almost to the level of insignificance. We discussed this amendment in considerable detail and with tenacity at earlier stages of the Bill. The Minister led us to believe that he would at least reflect upon matters although he did not use that phrase. Perhaps he can tell us how the Government are getting on. Have they anything to tell us and, preferably, have they anything to tell us that we would like to hear? I beg to move.

My Lords, the purpose of this clause is to assist the construction industry in its interpretation of what is to be included and what is to be excluded from construction operations and thereby of what is covered by the subsequent clauses in this part of the Bill. I have understood the Government's desire to recognise the difference between the process industry in its contracts and the building and civil engineering industry in its contracts. Like a number of noble Lords, I have always supported the Government in their desire to keep this distinction but I wish to achieve clarity for the interpretation of this part of the Bill by the industry.

At the Committee and Report stages my noble friend Lord Lucas recognised that there remains confusion as to the inclusion of the words "construction" and "steelwork", which is the subject of one of the amendments we are discussing in this group, in subsection (2)(c). I would hope that my noble friend could confirm that steps will be taken in another place to clear up this confusion for the sake of the industry. I do not believe that this is an exercise in semantics. It is an important concern to the industry which needs the improved climate in which to work, which the Bill seeks to achieve.

My Lords, in supporting the amendment of the noble Lord, Lord Howie of Troon, I have been concerned about the definitions in subsection (2)(c). Because I was uncertain about the inclusions and exclusions, I moved an amendment at Report stage which I hoped would take the sting out of the argument by making all contracts, even within the excluded category, included unless both parties agreed that they should be excluded. The Government did not accept the amendment but I was pleased to hear the comments of the noble Lord, Lord Lucas, at Report stage when we discussed Clause 104 in which he explained his views on the definition of "construction". If I have understood him correctly, it is certainly my view that the industry does not have quite so much to fear from these exclusions as we originally thought.

At the risk of detaining the House for just a few minutes, I should like once and for all to clarify my interpretation of some simple definitions, perhaps as a kind of going away present for the Bill as it goes to another place, which possibly are sadly missing. "Process plant" is the equipment, pumps, vessels, motors, generators, coolers, heaters, pipes, cables and so on which enable the plant to operate. It is all manufactured or fabricated, mostly away from the site, and it is brought to the site for installation or assembly. It is my belief that these items are not constructed, which is where I have a problem with the clause, and they are certainly not constructed within the definitions of what I would call a construction-related Bill.

There are different types of process plant, which we have discussed to some extent ad nauseam—nuclear, water, sewage treatment, power stations, petrochemicals. But nearly all process plant is installed or erected on steel or concrete foundations or supports. It may be enclosed in steel or concrete framed buildings which may require earthworks and other foundation work to form a secure base on which the process plant can operate safely. It is important that, as such, steel foundations or framework is normally referred to as structural steelwork to differentiate it from the process plant, which, of course, may also have been manufactured in whole or in part out of steel.

Turning to the exclusions in the subsection and the comments of the noble Lord, Lord Lucas, at Report stage, manufacture, fabrication, installation and assembly of process plant is excluded. That includes the person and the firm using the cranes to install pumps on foundations and so on. The construction of foundations, the manufacture and the installation of structural steelwork are, or definitely should be, included, and that is a matter that we shall be discussing soon. I mentioned at Report stage the strong pressure and comments from the steelwork manufacturers that they should be included. But they are the structural steelwork people rather than the manufacturers of process plant. I certainly believe that if the definition is correct they should be included. They are not process plant manufacturers.

I am not really expecting an answer from the Minister to this rather long definition, but I hope that it may help the Government, when they come to the next revision of the Bill in another place, to clear up the wording and, in particular, to remove what has become something of a bogey word—construction—from the process plant. Much of the industry would then be happier.

My Lords, your Lordships will be aware that these matters were discussed at considerable length both in Committee and on Report. I support the remarks of my noble friend Lord Howie of Troon. I was hoping that we might have a government amendment in line 45 of page 58 to leave out the word "construction" in subsection (2)(c). I understood that the Government might have been prepared to do that. An amendment to that effect was moved at an earlier stage. As my noble friend Lord Berkeley said, that would clarify the position.

I am interested in Amendments Nos. 8 and 9, but I and my advisers are particularly interested in Amendment No. 10. As I have emphasised to the noble Lord, Lord Lucas, it is believed that water and effluent treatment are essentially construction operations and are not process engineering or process operations. Since the Report stage I have received confirmation that that was the original intention of the authors of the Latham Report. Therefore, I hope that when considering the matter the Government will bear that fact in mind.

My Lords, the noble Lord, Lord Howie of Troon, has made it quite clear that, with these amendments, he is pressing the Government to explain their intentions on process engineering work. At Report stage I said that we were looking again at the introduction of Clause 104 (2)(c) to make sure that the right line was drawn between process engineering and other types of construction activity. Although that process will not be complete until we are in a position to lay amendments in another place, I am now able to give the House some clear assurances. In view of the amount of time that your Lordships have spent on this in debate, I should like to spend a few moments explaining our intentions.

First, on steelwork, which is the subject of Amendments Nos. 8 and 9, the arguments of noble Lords opposite have not convinced us that all steelwork on a process engineering site should be subject to the provisions of the Bill. However, we believe it is possible to distinguish between steelwork which is directly and necessarily connected to plant and machinery—steelwork, which forms, if you like, an integral part of the machinery—and other steelwork on the same site. We intend to bring forward an amendment which places integral steelwork squarely within the process engineering exclusion, but which would leave the remainder subject to Part II. Steelwork in a factory roof, a canteen or a visitor centre—just to take a few examples—would then be covered by the main provisions of the Bill.

Secondly, we have been convinced by the argument behind an amendment put forward by the noble Lord, Lord Williams of Elvel; namely, that the word "construction" at the beginning of subsection (2)(c) is misleading. While we would not go quite so far as the noble Lord, Lord Berkeley, who claimed that the term "construction" was never used in the putting together of plant and machinery—I certainly remember constructing plant and machinery out of Meccano—we certainly agree with him that it is unhelpful here. We shall bring forward an amendment as soon as possible to remove this source of confusion.

To reiterate and summarise our position, it is not, and never has been, our intention to exclude from the Bill all construction work on a process engineering site. We wish to exclude work only on plant, machinery and such steelwork as is necessarily connected to plant and machinery. Ordinary civil and building work would not be excluded.

Finally, I wish to deal with Amendment No. 10, which is identical to one put forward at Report stage by the noble Lord, Lord Williams of Elvel. There can be no doubt that the treatment of water and effluent are processes, and that the water and sewerage industries are process industries. I have already pointed out at Report that they spend about £500 million a year on process plant and machinery. It is quite true, as the noble Lord, Lord Monkswell, has suggested, that a lower proportion of their capital expenditure is on plant than in some other process industries—some 18 per cent. in water and sewerage as opposed to 52 per cent. in nuclear reprocessing and 75 per cent. in petroleum refining. However, since it is only work on plant, machinery and connected steelwork that will be excluded from the Bill, I hope that your Lordships will accept that this will leave a great deal of water and sewerage work to be classified as normal construction operations. Some of the illustrations of reservoirs, tunnels and other operations of that type that we have had from the noble Lord, Lord Howie of Troon, at previous stages of the Bill, are clearly within the construction ambit rather than the process ambit, and therefore come within Part II of the Bill. In view of what I have said, I hope that the noble Lord will feel able to withdraw Amendment No. 8, and that he will not move Amendments Nos. 9 and 10.

5.30 p.m.

My Lords, before the Minister sits down, perhaps I may point out that he has mentioned the word "construction" and the suggestion made by my noble friend Lord Williams of Elvel previously, that it was misleading to have it in an exclusion clause for construction operations. I am very glad that the Government seem to have listened to that, albeit that they may be seeking to change the situation in a slightly different way.

Can the Minister also look at the word "demolition"? I hope that he will make a distinction. One speaks about "process plant" and a distinction between "installation" and "dismantling", which might be broadly considered to be process plant activity, and construction and demolition which can generally be expected to be within the construction industry regime. I am getting nods of assent from my noble friend Lord Berkeley, so I believe I am on the right track. Obviously, the Government cannot respond immediately, but I hope that they will bear this point in mind when they come to reconstituting this part of the Bill—as they appear to have promised that they will—in another place.

My Lords, I am beginning to warm towards the Minister. I should have liked to have warmed towards him earlier and even to have warmed more warmly than I am now doing. He has listened to what we said. Not only has he listened, but he has heard it as well, and that is not always the case. I was particularly pleased when he made a distinction between structural steelwork, which is in the form of a building, and that which is an integral part of the process plant because I believe I can remember explaining that to the Minister at least twice at earlier stages of the Bill. From his comments, I believe the Minister realises that when we talk about structural steelwork on process sites, we are not talking only about the roofs of canteens and things of that sort, which he instanced, but also what may be quite major structural steelworks. That is clear from the latter part of what he said. With the warmest of regard, I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

[ Amendments Nos. 9 and 10 not moved.]

moved Amendment No. 11:

Page 59, line 3, at end insert ("unless undertaken by the contractor or if not specific to the agreement").

The noble Lord said: My Lords, I am in something of a quandary here. The noble Viscount, Lord Ullswater, pointed out to me that when I tabled an amendment as regards Page 59, line 3, I really meant line 6. I believe that I meant to refer to line 6; but, on further reflection, I probably meant both. I omitted to table two amendments which I should have done, but I believe that one is enough for our purposes. Therefore, I shall stick to the proposal of the noble Viscount, Lord Ullswater, that I really mean line 6 because he has told me that he agrees with me on that, as he often does.

It is a quite simple matter which relates to components. The illustration that I used at Report stage were the bearings in a dry dock on which the gates bear. The other illustration that we know of is precast railway sleepers, which are made off-site by a contractor or subcontractor and brought on-site by him, not as supplies, but as supply fixed. This is a matter in which the noble Lord, Lord Swinfen, was very interested at an earlier part of the Bill: in fact, he was the first to identify this omission. We have discussed this matter quite adequately.

The Minister gave an undertaking that he would consider what we had said, and we have high hopes that he will come forward with some improvement on the amendment that we have suggested. I beg to move.

My Lords, I confess to the House that I spoke to the noble Lord, Lord Howie, to indicate to him that I thought that perhaps he might be mistaken as regards the line in the amendment. Therefore, I should like to speak to the amendment as though it related to line 6, and I beg leave of the House to do so.

At each stage of this Bill I have raised anxieties about that part of the industry which is involved with the manufacture of structural steelwork and other specialised components off-site. My noble friend Lord Lucas has agreed on previous occasions that he would like to see this sector of the industry—so much the modern method of construction as I have indicated before—brought within the ambit of this Bill. Therefore, I trust that when the Bill is considered in another place, suitable wording—I stress that—rather than sympathetic thoughts, can be found to cover the purport of this amendment.

My Lords, again, we are speaking about a grey area between that which is genuinely considered to be construction and that which is not considered to be so. That is one of the problems with the drafting of the Bill. In the Government's deliberations between now and the consideration of this Bill in another place, I wonder whether they might think in terms of a change in attitude to what the Bill seeks to do. As I understand it, it seeks to ensure that where there is a construction industry contract, there is a fall-back position that ensures everything does not get snarled up in procedural and contractual disputes about which we have heard so much during the consideration of this Bill, and as being a real problem for the construction industry as a whole.

I believe that there is general agreement that those aspects peripheral to the construction industry; for example, the making of nuts and bolts at one end or the determination of a complete contract—if I may put it that way—at the other where the person letting the contract is quite happy with the contractual arrangements required, and whether a fall-back position is needed.

We are looking at the area in the middle, which is neither covered by the Supply of Goods (Implied Terms) Act; nor is the subject of what perhaps I may describe as political, rather than contractual, decisions. Rather than think of it as a process whereby those affected by the Bill would be excluded from the operation of its provisions, one should think of it as inclusive. If there is no other arrangement, the parties will effectively be covered by the Bill. It is a fall-back position.

I agree that the wording of the amendment—and where it should fall within the Bill—lacks a little clarity, as has been said by the previous two speakers, but I wonder whether it will be possible for the Government to agree that, failing all other situations, a contract would be considered to be a construction contract for the purposes of the Bill if no other regime applied. Such a provision would, I hope, include the grey areas and should not try to narrow the scope of the Bill. Unfortunately, I suspect that what will happen is that a large part of our industrial construction life will be left in a grey area of limbo and will not be covered by the Bill when I think that we would all agree that it should be covered by the Bill.

My Lords, I think that after the noble Lord, Lord Williams of Elvel, spoke to a similar amendment on Report, he agreed that the words "if not" would be better left out. That was something of a disappointment to my officials who had tied themselves in knots trying to find out what he meant. As the noble Lord, Lord Howie, has tabled an identical amendment, we have been able to avoid such detailed consideration now and have addressed ourselves solely to the spirit behind the amendment, which is whether or not "supply and fit" contracts should be brought within the Bill.

This is a difficult area in which I do not think that it is possible to have perfection. In the end, we may well need the assistance of Henry VIII, as he is built into the Bill.

It is not the Government's intention, nor I believe is it the will of this House, that the provisions of the Bill should extend to those who simply manufacture or supply goods to the construction industry; nor indeed, is it the wish of the suppliers themselves. Nevertheless, we are keen to help those contractors who manufacture systems and components, and then fix them into place. We therefore propose to bring forward, as soon as possible, amendments to cover the whole of such "supply and fit" contracts. I cannot say more at this stage: these amendments will need to be most carefully drafted, and their consequences considered at length. However, I hope that I have made our intentions plain, and that they meet with the approval of your Lordships.

I turn to the question raised by the noble Lord, Lord Monkswell. I do not immediately see the advantage of what has been proposed, but we shall consider what has been said. If anything comes of that, the noble Lord will doubtless see it when the Bill returns to your Lordships' House for consideration of Commons Amendments.

With those words, I hope that I have managed to persuade the noble Lord, Lord Howie, to withdraw his amendment.

My Lords, I think that the Government's intentions are clear to me and, as far as I can make out, they appear to be good intentions. With that thought, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The noble Lord said: My Lords, this amendment relates to signwriting and painting. We discussed it fully at an earlier stage when the Minister agreed with the amendment that was proposed by the noble Lord, Lord Williams of Elvel, and gave an undertaking at col. 924 of the Official Report to bring forward a suitable amendment "as soon as possible". I welcome that comment, and ask merely whether "as soon as possible" is the same as "as soon as is reasonable". I beg to move.

My Lords, I am afraid that on this occasion I have nothing to add to what I said on Report. We are convinced of the case; we shall be bringing forward an amendment; we shall do that as soon as possible.

My Lords, in the face of those gracious words, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.45 p.m.

moved Amendment No. 13:

Page 59, line 17, leave out from ("operations") to end of line 22.

The noble Lord said: My Lords, I am not optimistic that the noble Lord on the Government Front Bench will react with the same graciousness to this amendment, although it does not relate to a big part of the Bill. Yet again I query the manner in which the Government have taken references to the professional work of architects, surveyors, consultants and others from income tax legislation and readjusted them to suit the Bill. Several of us in this House do not make distinctions between "architects or surveyors" on the one hand and,

"consultants in building, engineering, interior or exterior decoration or in the laying-out of landscape",

on the other hand. We think that they are all professional practitioners in the same business; namely, the construction business. I am still not convinced that splitting those professionals in that way is correct. It was not done in the income tax legislation.

When the Minister kindly gave me a written explanation of why that has been done, he pointed out an error of mine. He said that I had used the last words in Clause 104(3)(b)(ii),

"in relation to such operations",

as though they had come from income tax legislation, which they had not. That was an oversight on my part. The Minister indicated that agreeing to my proposed amendment would lead one to the conclusion that the words,

"in relation to such operations",

referred only to "the laying-out of landscape". I am not sure that that is true. However, even if it were true, I should like to put another suggestion to the Minister—this is not a proposed provision because it is not put forward as an amendment. If he were to put the words,

"in relation to such operations",

which occur now in the last line of that paragraph, after the word "work" in line 18, the provisions would read, "the professional work in relation to such operations of architects" etc., etc. That would overcome my objection to splitting those construction professionals into two separate groups. That is an artificial distinction which did not appear in the tax legislation and I do not believe that it is necessary here.

There is a tradition of animosity between architects and engineering consultants. It is a tradition of animosity which I have spent a huge amount of my life trying to heal. I believe that having such a distinction enshrined in legislation—for the first time, I think—would undo my good work in trying to heal that animosity. I beg to move.

My Lords, I rise to support the noble Lord, Lord Howie, in his amendment. Indeed, I would go slightly further. The noble Lord identified the distinction in the Bill between architects and surveyors on the one hand and consultants in building, engineering, etc., on the other hand. I agree wholeheartedly with the noble Lord that that is a false and wrong distinction to be drawn between two groups of honourable professionals, if I may put it like that.

Although I support this amendment, I hope that the noble Lord agrees that, in leaving out distinctions between particular professionals, other ancillary professionals who are essential to construction operations will be included; for example, catering staff. I refer to the people who provide bacon butties and cups of tea on construction sites. I believe that they should be included in the provisions of the Bill.

Noble Lords will know that the provision of adequate catering facilities on a construction site can be the making or breaking of the whole operation. Although I am sure that the noble Lord, Lord Howie, agrees with me, the main point is that a false distinction should not be drawn between the two main professional groups involved in a construction contract. With great pleasure, I support the amendment and hope that the Government agree with it.

My Lords, I appreciate that the noble Lord, Lord Howie of Troon, does not like the way in which the Bill is drafted in dividing the world of construction professionals into sheep and goats, the sheep being lame-brained, lame-footed, daft, woolly animals who just produce a low grade of fibre, and the goats being sagacious, energetic animals that produce cashmere. I am sorry that he objects to being numbered among the goats under that definition.

I was very attracted, not by the amendment that he tabled, but by the amendment that he mentioned in passing. He referred to bringing forward the words "in relation to such operations" immediately after the mention of professionals. That is certainly a matter that we will consider.

In case there is any doubt, it may be worth pointing out that the wording of Clause 104 as it stands covers the professional work of all consultants in building, civil work and construction generally. Anyone who has a professional input to the operations listed in Clause 104(1), except in so far as they are modified by subsection (2), will enjoy fair contract provisions. That will include such people as lighting consultants, who I believe were mentioned by the noble Lord, Lord Williams, at the last stage. I am sure that noble Lords will agree that this is a most important function of subsection (3).

Although the Government do not agree with removing this provision, as the noble Lord suggests, their attention has been drawn to the question whether paragraph (a) is required. Dare I admit that this may be another hangover from the Income and Corporation Taxes Act 1988? We will take the opportunity, having been prompted by the noble Lord, to look most carefully at this paragraph but, bearing in mind the remarks of the noble Lord, Lord Monkswell, about the presence of catering staff on site, perhaps that is where they come into the Bill. We will look at it carefully. If we believe that paragraph (a) is no longer necessary, we shall table an amendment to delete it. We shall consider the suggestion made in passing by the noble Lord about bringing forward the generality, so making this an all-inclusive reference to professionals. However, as far as concerns this particular amendment, I hope that the noble Lord will agree to withdraw it.

My Lords, I did not fancy my amendment too much either. It seemed to go a bit far. It could perhaps have been justified. Noble Lords may have noticed that I made no attempt to justify it but spoke of something else. In these circumstances, that is a sound way of going about one's business. What may be termed my amendment that I mentioned in passing occurred to me only late in the day. I am pleased that the Minister thought that there was some merit in it. I was terrified when he started to remove paragraph (a). Once one begins to remove paragraphs from the Bill, who knows where it will end? He has been advised on several occasions to withdraw bits of it to which he has stuck. However, I am encouraged by what he has said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 106 [Provisions applicable only to agreements in writing]:

moved Amendment No. 14:

Page 60, line 14, after first ("in") insert ("adjudication or").

The noble Lord said: My Lords, I have nothing to say about this amendment, except that it has been discussed before. The Government looked at it with mild favour. I beg to move.

My Lords, the noble Lord is quite right. We agreed to think further about it. Having done so, we have concluded that the noble Lord is right. It should he possible for an exchange of communications in adjudication proceedings to provide evidence of a written agreement. While we are clear on the intention of the amendment, the drafting will need to be considered very carefully. I hope that with that assurance the noble Lord will feel able to withdraw his amendment.

My Lords, I am greatly heartened by the notion that I am right. I shall go to the Library to see whether or not they can discover any other occasions on which I have been described as right in the past 18 years while I have been in this Chamber. I am little worried that he is unsure about the drafting. There are only two words to consider. At the moment, I do not see how these words can be drafted in any other way, but no doubt it is possible. I will not irritate the noble Lord by carrying on. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 138 [ Home energy efficiency schemes]:

[ Amendment No. 15 not moved.]

6 p.m.

Schedule 2 [ Architects]:

moved Amendment No. 16:

Page 87, line 28, leave out ("seven") and insert ("eight").

The noble Lord said: My Lords, I had rather hoped for some respite while Amendment No. 15 was discussed, but I have been refused that. Schedule 2 deals with the registration of architects. Whether they are sheep or goats I do not know, but I am very much on their side. I dealt with this at some length at Second Reading. I do not believe that everybody agreed with me. As the Bill stands, the body which looks after architects (ARCUK) is to have seven members elected by registered architects and eight others appointed by somebody or other. I propose to change it so that the elected members representing architects directly are in a majority of eight to seven instead of in a minority of seven to eight.

I am afraid that I have to wax philosophical for a moment or two. I remind the House of certain elements of a profession as opposed to any other form of economic activity. I begin by quoting the famous journalist on the Baltimore Sun, H.L. Mencken who published a number of books which he called Prejudices. In one of them he remarked:

"It is, after all, a sound instinct which puts business below the professions, and burdens the businessman with a social inferiority that he can never quite shake off, even in America".

Mencken was giving the profession a moral stance or dimension which ordinary business did not have. I give another quotation to which I alluded at Second Reading. The quotation comes from the socialist philosopher R.H. Tawney. He was writing on this occasion as a philosopher rather than as a socialist. This is a matter that we have to think about carefully, because it is the essence of a profession as opposed to a public company or some other business organisation. He said:

"A Profession may be defined most simply as a trade which is organised, incompletely, no doubt, but genuinely, for the performance of function. It is not simply a collection of individuals who get a living for themselves by the same kind of work. Nor is it merely a group which is organised exclusively for the economic protection of its members, though that is normally among its purposes. It is a body of men who carry on their work in accordance with rules designed to enforce certain standards both for the better protection of its members and for the better service of the public".

That is a definition which has not, perhaps, been carried out fully. I notice in passing that the noble Earl, Lord Caithness, has come into the Chamber. It would be convenient if he were to take his place, because I may refer to him in a moment or two. I give him due warning, but very gently.

The essence of this issue is that the profession governs itself. I cannot for the moment think of any profession in which the governing body—the disciplinary body, because that is what is the case here with ARCUK—is dominated by a group of people who are not members of the profession itself. I do not believe that it is true of any other profession. If I am mistaken, I hope someone will point that out. If I am wrong, I shall try to ignore it. This is the crux of the matter. I have no doubt that this is the best deal that the RIBA could get out of the Government in order to get ARCUK reinstated, because, at one time, when the Warren Report was published, the Government wished to abolish ARCUK altogether.

My Lords, that is more or less what I meant. There was substantial discussion. Eventually this compromise was reached. I believe that the compromise was mistaken, and I should like to reverse it for the following reason: if the majority is eight outsiders to seven insiders, there is one outsider who might sway the balance. If it so happened that the outsider appointed was me—that would be an excellent idea—the balancing factor would be a person who is sympathetic towards architects and the architectural profession.

On the other hand, it is conceivable that the eighth person (the balancing factor) might be the noble Earl, Lord Caithness, who expressed at an earlier stage of the Bill what I can only describe as a rather unkind attitude towards architects. If he were the balancing factor instead of me, we would have a different kind of disciplinary organisation.

It is important to realise that despite the changes which have occurred in the economic field which have affected the economics of the professions, the professions differ from ordinary business because the professional ethic and professional ethos is different from the business ethic and business ethos. The distinction is one which should be preserved. I know that that sounds terribly old-fashioned in these modern get-up-and-go days, but I beg to move.

My Lords, perhaps I may make a quick point because I have not been taking part to any great extent in this part of the Bill, which deals with architects. If the board is to deal with the self-regulation of the profession for the benefit not merely of the profession but to ensure that the general public (the consumers) receive a high standard of service, the noble Lord, Lord Howie of Troon, will find, if he looks at any other self-regulating bodies, that they have in fact a majority of independent members, and that those self-regulating bodies have a majority of independent members on all of their committees, so that the professions, or in some instances the industries that they represent, do not put their own purposes and well-being before those of the consuming public.

My Lords, I suspect that my knowledge and experience of these things must be different from those of the noble Lord, Lord Swinfen, because my understanding is that in most self regulating professional organisations—if I may describe them like that—there is a recognition of the need to involve the consumer who is not a member of the professional group. Those professional groups of which I have some slight knowledge maintain control of their own affairs. In the field of engineering, determination of who shall and who shall not be a chartered engineer—the definition of a professional engineer in this country effectively—is made by the Engineering Council. My understanding is that the majority, if not all, of the members of the Engineering Council are chartered engineers.

My knowledge of the medical profession suggests that the ruling council of the BMA (the BMC) is dominated by doctors. While the doctors may have non-medical people sitting with them, the judgment is effectively made by the doctors. I am wracking my brains to think of other professionals who would be professionals under the definition of my noble friend Lord Howie of Troon, but I cannot think of any. I put my scant knowledge at the disposal of your Lordships' House. I believe that I have a different impression of things from the noble Lord, Lord Swinfen.

My Lords, the aim of the reforms to the Architects Registration Council is to replace a large organisation, almost entirely representing the interests of architects, with a small and efficient board representing both the interests of architects and of the general public.

One of the main arguments put forward by architects in favour of keeping the protection of their title, is that they must not only satisfy the client, but also meet a higher obligation to the public at large. If it is in the public interest to protect the title "architect", then it is essential that the board which protects that title is also seen as a body which is there to protect the public. That echoes what my noble friend Lord Swinfen said.

The Bill provides that there should be eight lay members and seven architects on the board. I believe that a lay majority of one strikes the right balance between protecting the public and looking after the profession. It signals the importance of the board's public role, but it does not in any way diminish the importance of architects as a profession.

The noble Lord, Lord Howie, asked whether any other profession has a similar arrangement. I am not immediately aware of any, but I can think of several that would benefit from it.

I am also confident that most architects accept that we have got the balance right. The proposal for a lay majority was part of a package of reforms which was agreed to by both the Architects Registration Council and by the Royal Institute of British Architects. It also has the support of the unattached architects, those not affiliated to the RIBA. They are the equivalent of Cross-Benchers. A substantial majority of those who responded to our consultation paper also supported the proposal for a lay majority.

Lay members will have a majority of only one and there will be a balance between those representing public and consumer interests and those who represent users of architectural services. This could, of course, include clients and individuals from the construction industry but I am sure that your Lordships will accept that their numbers will be insufficient to have an undue influence on the board.

I should stress that the Bill provides that there will be consultation on the proposed nominated members and that government will consult those with an interest in the composition of the board.

The lay majority is, of course, a new departure as is the composition and working arrangements of the new board. We expect that the new arrangements will work well and will benefit both the profession and the public. Nevertheless, we accept that circumstances change over time. For this reason, the Bill gives the Secretary of State the power to change by statutory instrument the provisions of Part I of Schedule 2 which includes the composition of the new board.

I hope that I have reassured the noble Lord, Lord Howie of Troon, and that, although we believe that on this occasion he is wrong, he will feel able to withdraw his amendment.

My Lords, I am not at all sure. I do not believe that the intervention of the noble Lord, Lord Swinfen, was helpful. My noble friend Lord Monkswell mentioned the Engineering Council. As we are discussing the construction industry, perhaps I may point out that many of the component institutions in that council have their own councils of one kind or another. There are about 50 and not a single one has even one lay member. I believe that that is a mistake. The Institution of Civil Engineers, of which I am a member, has a council of about 45, which is rather a lot, all of whom are chartered engineers. The institution would not let a lay person through the door. I believe that that is a great mistake. I do not doubt that there should be lay members on all such bodies because there is a public interest element.

I object to the fact that the profession will have a council on which the majority consists of lay members who are not members of that profession. While they will have an interest in that profession it might often be odd or even amateur. Come to that, it might even be royal. I believe that that is a mistake.

I know that that situation came about because it was the best deal that the RIBA could achieve in rather dismal circumstances. I know that the Minister is correct in saying that he has been accepted by the official architecture profession. However, it has been questioned by many individual architects who feel aggrieved that their profession should be taken out of their hands in so far as they take a great interest in it.

I know that I shall not get anywhere with my proposal because my noble colleagues on the Front Bench do not agree with me. Nor does the Government Front Bench. I beg leave to withdraw the amendment but I hope that at some stage the Secretary of State will come to realise that I am not wrong but right.

Amendment, by leave, withdrawn.

[ Amendment No. 17 not moved.]

An amendment (privilege) made.

6.15 p.m.

My Lords, I beg to move that the Bill do now pass.

We shall send the Bill to another place with 156 amendments. I am pleased to point out that 62 of those were tabled in response to points and concerns raised in this House. In particular, 28 amendments were tabled in response to points from the noble Lords, Lord Williams of Elvel and Lord Howie of Troon. And that does not include some highly important changes which will not see the light of day until the Bill reaches another place or, indeed, until the draft scheme is published after Royal Assent.

Twenty-one amendments were tabled in response to points from the noble Baroness, Lady Hamwee, and she has a latent amendment or two as well. My noble friend Lord Swinfen prompted 20 amendments and the noble Lords, Lord Berkeley, Lord Dubs and Lord Rix, appear in the list together with the Delegated Powers Scrutiny Committee. Noble Lords, having been taught mental arithmetic at school, may recognise that my figures include an element of double counting. I had no wish to do down those noble Lords who took an equal part in debating other noble Lords' amendments.

Those 62 amendments were the important ones. The other 94 largely correct minor drafting weaknesses. This has been a well drafted Bill and there has been an effective Opposition and a responsive Government. That has been a great credit to this House.

The provisions in Part I of the Bill will give local authorities a greater degree of discretion in the management of their private sector renewal programmes. All who have spoken on Part I have made the point that local authorities ought to have considered and constructive policies for the improvement of private sector housing.

Local authorities are asked to consider their housing strategies annually when writing their housing investment programme submission. It is through this mechanism that we can ensure that local authorities are meeting their duties and obligations in terms of assessing the fitness of the housing stock in their area and taking action where it is found to be necessary.

In order to help local authorities the department will issue revised guidance to accompany the new legislation. A working group, including local authority officers, has been established to advise on the content and structure of the guidance.

It is my belief that the Bill will improve the range of tools available to local authorities and help in securing the improvements to unfit private sector housing that we are all seeking. The move to discretionary renovation grants, the retention of mandatory disabled facilities grant, the introduction of home repair assistance, the addition of a further option on fitness enforcement and increased flexibility in the operation of group repair schemes should all help in reaching local renewal objectives.

We have also sought to include provisions where experience has shown the current legislation to be deficient. These include the power for local authorities to impose conditions on grant recipients; to recover grant on breach of conditions; to extend the range of grants available to meet the costs of works to protect against fire; and to recover grant where an applicant is found not to have been entitled to help.

This House has improved Part I in several respects. First, while it was acknowledged that there was no problem with regard to those considered eligible for disabled facilities grant, it became clear that the House wished to see a less dated reference to disability within the Bill. I believe that we have been able to achieve that without introducing any conflict with other statutes governing the provision of assistance, in whatever form, to disabled people.

Secondly, we were persuaded to reflect on the operation of the prior qualifying period for grant assistance. We believe it is an important principle that grant assistance is not to be used for financial gain. The prior qualifying period seeks to ensure that grant goes to those who, through no fault of their own, are living in poor housing conditions. Those who have bought a new home which they know to be unfit should not normally do so with the expectation of grant.

However, on consideration we recognised that there were cases where a rigid prior qualifying rule might undermine a local authority's strategy for tackling empty properties or depressed areas. Amendments we brought forward either remove the prior qualifying period or give local authorities discretion to disapply the condition. We believe that that strikes the right balance in not restricting authorities' strategic objectives while making it clear to whom grant should be available.

We also announced our intention, once the Bill is out of the way and before the end of the year, to set in train a review of the housing fitness standard. This will ensure that important issues your Lordships raised about the requirements in the standard and its application are properly considered.

We have also spent many hours discussing Part II, which provides for fair contracts provisions in construction contracts. These originated from the review by Sir Michael Latham into procurement and contractual practices in the construction industry. His conclusion that the industry's productivity was being undermined by unnecessary disputes and poor contractual practices has been echoed frequently in this House. Following extensive consultations with the industry, the Government decided to focus on two key areas: dispute resolution and payment procedures.

Much of the debate in this House has concentrated on two main topics. The first of these has been how to define "construction". I am grateful to noble Lords for helping us to hone and clarify that definition. The debate has prompted the removal of certain exclusions, and we have undertaken to remove others.

We have also sought to clarify the way the process engineering industry is excluded from the terms of this legislation, an issue which we have discussed again today. Noble Lords have convinced us that there is still further work to do on this in another place.

The second major area of debate on Part II has concerned the right of a party to refer a dispute to the rapid dispute resolution procedure known as adjudication. The main issue here has been provided by our draft proposals for a fall-back adjudication scheme which would operate if contractual arrangements proved inadequate. These suggested that an adjudicator's decision under the scheme should normally be final, and several noble Lords felt this was more characteristic of arbitration.

We listened carefully to the views of noble Lords, in particular the noble Lords, Lord Howie of Troon, Lord Berkeley and Lord Williams of Elvel. As a result, I announced at Report stage that, when we came to consult on the scheme for construction contracts following Royal Assent, we would advance a modified proposal. We intend to suggest that, under scheme arrangements, it should be possible to reopen disputes at practical completion of the contract, unless parties have agreed otherwise. We accept that this is more closely in tune with the way adjudication is currently practised in the industry. Nevertheless, I have also sought to remind noble Lords that our aim with legislation is to reduce the overall level of construction disputes, and to speed up the resolution of those which do occur—not simply to postpone the date of final resolution.

I now turn to Part III which would replace the Architects Registration Council of the United Kingdom—ARCUK—with a smaller and more efficient board which will be more responsive to the needs of the public at large. These reforms have the support of all the main branches of the profession. I am pleased that your Lordships also gave them your support in Second Reading and Committee.

The current registration arrangements have been in operation for over 60 years, so it is natural that there are some concerns about how the new arrangements will work. The noble Lord, Lord Rodgers of Quarry Bank, tabled a number of amendments which reflected these concerns. I believe I have been able to reassure him on two matters in particular. First, I agree with the minimalist approach implied by his proposed amendments. I reiterate that having abolished the Board of Architectural Education and Admissions Committee, we do not wish the new registration board to create new large and expensive committees in their place.

Secondly, I agree with the noble Lord that appointed members should be independent men and women who wish to perform a public service. Our proposals provide that they should represent a balance between the interests of those who use architectural services and those of the general public.

At Second Reading the noble Lord, Lord Williams, welcomed Part IV of the Bill, and in particular the provisions relating to relocation grants, more or less without reservation. We certainly hope that local housing authorities will make full use of these new powers once they become available next year.

The other main issue that emerged in debate on Part IV was concern for information, in the interests of public accountability, about the process for allocating grant under the single regeneration budget. As I have said, I believe that a great deal of information is available—we are certainly not trying to hide anything. But we shall keep the publication of information under review.

Noble Lords opposite tabled several amendments to the Bill's provisions for tidying up the arrangements for winding up the Commission for the New Towns, urban development corporations and housing action trusts, mainly with the aim of ensuring that local authorities are fully involved.

Our main concern in providing for the establishment of one or more residuary bodies is to ensure that we have arrangements that are flexible and cost-effective, with residual matters passing to those best able to deal with them. This certainly does not exclude local authorities. Indeed, we are actively encouraging the urban development corporations and the Commission for the New Towns to transfer matching packages of assets and liabilities to the relevant local authorities as part of their disengagement strategies, wherever this can be agreed on appropriate terms.

On housing action trusts, I can repeat the assurance that I gave the noble Lord, Lord Dubs, at Report stage that nothing we are doing affects the statutory right of secure tenants of a trust to return to being tenants of the local authority, if that is what they want. However, local authorities will not be the appropriate recipients for everything; nor are they likely to want to be saddled with some of the longer-term liabilities.

I conclude by thanking all those who have helped ensure that the Bill has been thoroughly considered during each stage of its passage through your Lordships' House. The noble Lord, Lord Williams of Elvel, has led for the Opposition with his usual courtesy, eloquence and attention to detail and he has been most ably supported by the noble Lords, Lord Dubs and Lord Howie of Troon.

We have benefitted greatly from the considerable expertise of the noble Lord, Lord Howie of Troon. I trust that he takes pleasure in the contribution that his hyperbole has made to the Bill's asymptotic approach to perfection. The noble Lords, Lord Berkeley and Lord Monkswell, have also brought their engineering experience to bear, and though the noble Baroness, Lady Hamwee, is a self-confessed novice in constructional matters, she had the able assistance of the noble Lord, Lord Ezra. She has suggested a number of amendments to test the drafting of the whole Bill, and in particular she has demonstrated that it is seventh time lucky when it comes to controlling Henry VIII.

I also thank my noble friends Lord Ullswater and Lord Elton for a number of valuable interventions borne of their own considerable acquaintance with the industry. To them and to all other Peers from all sides of the House who have contributed to the debates, I express my thanks for well-argued and constructive speeches. I include in that of course my noble friend Lord Swinfen, who has contributed so much to our debates on this Bill. I hope that he feels that we have been able to go a significant way to meet his concerns.

I end by saying what a privilege it has been for me to work on the Bill. I note that that is solely because my noble friend Lord Ferrers has been undergoing a period of reconstruction and steelwork from which he is recovering well.

Finally, I pay tribute to the officials from the departments involved with the Bill, to the officers and staff of the House and to the parliamentary counsel for the unstinting support that they have given. It is a much improved Bill that now goes to another place, where it will, I trust, receive a little further polishing to follow the vigorous sanding down that it has endured here. I commend the Bill to the House.

Moved, that the Bill do now pass.—(Lord Lucas.)

6.30 p.m.

My Lords, on Second Reading, I said to the House that this was a long and rather complicated Bill and that our proceedings would be equally long and rather complicated. And so they have turned out to be.

I said also on Second Reading that I regarded the Bill as something of a curate's egg: there were good bits, bad bits, and rotten bits. Nothing that has happened in our proceedings since that day has convinced me that this Bill is anything other than long and rather complicated and still is a curate's egg.

In our view, Part I does not address the fundamental problem which I expressed on Second Reading; namely, the state of disrepair of private housing in Britain. As I explained to your Lordships, some 1.5 million houses in private ownership in England alone are officially unfit. In seeking to dismantle the mandatory scheme for renovation of unfit private housing, Part I does not seem to us to go any way at all towards remedying that situation. In fact, we believe that it will make the situation worse. Therefore, in spite of some of the amendments which the Government accepted, Part I still remains a pretty poor and shoddy part of the Bill. The Government will no doubt have to justify that in another place.

I still regard Part II as in a formative stage. When it was drafted and presented to your Lordships, it was unsatisfactory. It did not take up all the provisions of the Latham Report. As one noble Lord pointed out, a certain amount seemed to have become lost in translation between Latham and the parliamentary draftsman.

The intent of Part II is good: the devil is in the detail. I understand that the Government have difficulty with it. However, the rumour is—and I hope that when he replies the Minister will say that that rumour is false—that the Government have in mind to drop Part II of the Bill altogether. I very much hope that the Government will persevere with that part because it is very important for the construction industry which, as I said on Second Reading, represents some 8 per cent. of gross domestic product in the United Kingdom and employs about 2.5 million workers.

Nevertheless, your Lordships have found a good deal of fault with the drafting of Part II of the Bill. In particular, I focus on what became of our discussions on the scheme for construction contracts. Despite what the Minister just said, I do not believe that the Government have fully understood the feeling in the industry generally that adjudication is not arbitration and that arbitration is not adjudication. If the Government can get that message into their head and reproduce that message in a future scheme, I hope that we will get a Part II which is rather more sensible than it is at present. I accept all the problems that the Government have had in defining what is in the construction industry and what is in the process industry. Indeed, they are most difficult problems to define in statute. Nevertheless, the Government have set their hand to this and I very much hope that they will pursue it in the light of discussions that have taken place on a non-partisan and, I hope, a helpful basis from all sides of the House.

I have no particular comment to make on Part III of the Bill other than to repeat what I said on Second Reading; namely, that the Government seem to have abandoned the whole concept of the Warne Report and reverted to something which they previously condemned. As the noble Lord, Lord Lucas, rightly said, I did welcome the relocation grants under Part IV; indeed, I do so again. I am sure that in another place there will be more exploration of how they will operate than there has been in your Lordships' House. That is simply because we did not really have very much time as we have been concentrating on other issues. However, that will be a matter of great interest to my honourable friends in the other place, especially those who come from the Birmingham area where the relocation grants were, I believe, an innovation of the Birmingham City Council.

Our debates on Part V always arose rather late in the process of business. Perhaps we have not done full justice to the matter of the disposal of the assets of urban development corporations, housing action trusts and new towns. The noble Lord, Lord Ezra, will no doubt say—and he would be right—that we have not done justice to the widening of the home energy efficiency scheme which we debated earlier today. There is still much to be done on the Bill. Your Lordships are a revising Chamber, but we had to revise a Bill which started its passage in this House. It will now be for another place to revise a Bill that we have revised. I am sure that Members of the other place will set their minds to the task in the same way as your Lordships have done.

My thanks are due, first, to my noble friend Lord Dubs for assisting me most ably on the Bill. I should also like to thank the noble Earl, Lord Ferrers. In that respect, I am glad to hear from the noble Lord, Lord Lucas, that the noble Earl is recovering from the reconstruction and construction work that he has undergone. I very much hope that he will be back among us before long having been fully restored to health. My thanks also go to the noble Lord, Lord Lucas, who, if I may say so, was rather landed with a Bill in the middle of its process when the noble Earl had to leave. However, he has conducted himself with the greatest courtesy and efficiency. We all value the noble Lord's side quips which liven up our debates from time to time.

I should also like to extend my thanks to my noble friends Lord Howie of Troon, Lord Berkeley and Lord Monkswell. It is always extremely useful, putting it at its lowest, as well as profitable for those of us on the Opposition Front Bench, who do not necessarily understand the full detail of the Bill under discussion, to have experts sitting behind us who can point out where we are wrong, and indeed where we are right. I am most grateful to my noble friends for their assistance.

The Bill will now go to another place. As always, we look forward to seeing the results of those deliberations. In our turn, we will await the major part of the housing legislation which is being debated at present in the other place. We look forward—or not, as the case may be—to that event. I cannot say that I wish the Bill entirely well. There are parts of it which I like and parts of it which I do not like. I am sure that the noble Lord, Lord Lucas, knows that only too well after all our discussions. Nevertheless, I believe that your Lordships have done a good job on the Bill. There are still gaps in it, but I believe that the Bill leaves this House in a better condition than it started its passage.

My Lords, on behalf of my noble friend Lady Hamwee and myself I should like to say a few words at this final stage. As the Bill leaves this House I have two particular impressions. The first is the particular attention which the Government have paid throughout to the views expressed both from the Opposition Benches and, indeed, from their own Benches. It has been quite an exceptional case—and one which I hope will be followed in the future—of the Government really taking account of what has been said and trying to make the best use of it. The correspondence that has flowed from individuals has also been considerable. I believe that we have taken a big step forward in that respect. Indeed, it has been very much a joint effort to try to get the Bill into better shape.

We have also benefited enormously from the expertise of some noble Lords who have taken part in our debates. We have heard from the noble Lord, Lord Howie, from the Labour Benches, who has contributed with remarkable persistence. He always sits right at the back of the Chamber but, nevertheless, speaks with great knowledge and skill. We have also heard from the noble Lord, Lord Berkeley, who has only recently joined the House but who is also very skilled in such matters; and, of course, the noble Lord, Lord Monkswell, has joined in our debates with many wise words from time to time. From the Conservative side, I believe that the noble Viscount, Lord Ullswater, has been most helpful and objective in his interventions. We have gained a great deal from such expertise.

I shall not go through the substance of the Bill in detail, but, as regards Part I, I must say that I share the views expressed by the noble Lord, Lord Williams; namely, that I hope we shall not lose sight of the fact that we have a quite unacceptable level of unfit housing in Britain. I do not believe that the measures proposed in the Bill will make a substantial difference to the situation. Therefore, I hope that in due course we shall really begin to grapple with the problem. I do not believe that we are doing anywhere near enough to deal with it.

Secondly, the House will not be surprised if I refer to Part V of the Bill and the home energy efficiency scheme which the Government supported and on which the noble Lord, Lord Lucas, made some positive comments today. But, unfortunately, the recent diminution in government support has, I believe, given quite the wrong signal. They were doing the right thing and, I hope that, before long, they will continue in that positive manner. I am just sorry that the amendment introduced today was, for technical and possibly other reasons, not accepted. However, I hope that the matter will be reconsidered in another place.

Altogether I regard this as having been a very positive contribution to our debates. I look forward to the return of the Bill when it has been through what I hope will be similarly positive treatment in another place.

My Lords, I had an involvement with the launch of the Latham Report as a Member of Her Majesty's Government at that time, and in my role as Minister responsible for construction. Noble Lords will therefore understand that I followed the subsequent progress of the measure with some interest. I think there was an acknowledgement of the need to legislate in some areas for fair conditions in construction contracts.

At Second Reading I welcomed what was in Part II of this long Bill and commented on what was not in the Bill, including the establishment of trust funds and compulsory latent defect insurance as recommended by Sir Michael Latham in his report. Whereas the discussions on that part of the Bill have evolved, some areas of confusion have been identified and I believe that the Government have listened carefully to our comments. Like the noble Lord, Lord Ezra, I think they have listened to us to a significant extent. They have listened therefore to the comments of the industry, which we in the House have reflected. I, too, wish to compliment my noble friend Lord Lucas on the positive way in which he has handled the Bill in the absence of his, and my, noble friend Lord Ferrers. We have considered many government amendments. We have heard today of commitments to be implemented in another place. I welcome that and I thank my noble friend for it.

As the noble Lord, Lord Williams has said, the construction industry is an important industry and has come together to try to improve working arrangements. I very much welcome the Government's involvement in trying to assist the industry. I hope that when the scheme for construction contracts is sent out for consultation, the Government will listen carefully to the replies that they receive. I believe that this House has done its work diligently, good humouredly and properly. I look forward to the consideration of Commons amendments with great interest.

My Lords, at Second Reading I welcomed Part II of the Bill, which is the part with which I have been mainly concerned, although I impinged, albeit unsuccessfully, on Part III for a moment or two earlier today. I should say at this point that this is unquestionably my final contribution to the debate today. I have spoken often enough. I see heads nodding in agreement.

There are several defects in Part II. The main defect is that it deals with the Latham Report only in part. As the noble Lord, Lord Lucas, said at one point, there are other parts of Latham which would contribute towards the anticipated 30 per cent. reduction in costs which that report forecasts. This Bill only touches a part of that. I look forward to a further construction Bill, perhaps not encumbered with housing and other matters, coming before us shortly to complete the Latham proposals.

Noble Lords on both sides have tried to improve the Bill and we have persuaded the Government as regards a variety of measures. We have helped the Government to clarify their mind on various areas where they seemed to be confused, notably as regards the scheme. I think that the Government have at long last understood the difference between adjudication and arbitration, and when the scheme eventually appears that will be made clear. However, I remind the Government that I tabled an amendment to the Bill which would have made it clear in any case and would have shown the difference between the two terms on the face of the Bill. That was turned down of course, being a useful addition.

I remind the House that the Government helped us by publishing a draft scheme. Rather late in the day I realised that there were two schemes; that is, there was also a Scottish scheme. I suggested to the Government that a draft Scottish scheme might also be published as there are bound to be differences between the two owing to the different legal structures under which they will function. Apparently, this was not such a good idea. However, I hope that a draft Scottish scheme will be published reasonably soon so that it can be seen at least as early as the scheme which applies to England and Wales.

I have another proposal for the Government. When these two schemes are published in their final form after consultation—as eventually they will be—I suggest that they should be accompanied by an explanatory pamphlet for those who might be interested in such matters, as these people are likely to be contractors at the smaller end of the construction business. They may require more help in unravelling legal matters than the big contractors.

We had some difficulty as regards definitions. I am not sure that we have fully defined the construction industry. I am particularly unsure as to whether the distinction which we asked for has been fully made; namely, between the process industry as a whole and those parts of construction which relate to the process industry. I received a letter on this matter rather late in the day—I am sorry to say—from a business acquaintance of mine who is involved in subcontracting in the oil, gas and petro-chemical industry. The firm with which he is involved is a well established, large subcontractor. His firm has no complaints about the process industries in this contractual arrangement as regards the big operators. However, when the contractor—to whom the firm is a subcontractor—is one whose culture is in the construction industry and not in the process industry, that poses a problem. A contractor in the process industry would probably function by means of the acknowledged chemical engineering contract. However, where a main contractor is a civil engineering contractor, he is inclined to function within the culture of the construction industry which is less satisfactory. My friend is quite willing, as a subcontractor, to enter into subcontracts where the main contractor is a process contractor, such as Foster Wheeler, but is less willing when the main contractor—although in a process context—is a construction company in the usual sense. I draw attention to that point rather late in the day in the hope that such thoughts will be considered in another place when the Bill is further considered there.

I thank the Minister for what must have seemed to him a fairly daunting prospect when he embarked upon the Bill. He has acquitted himself extremely well. However, he had the most good natured opponents—or indeed allies—that he could have hoped for!I thank him for the manner in which he has dealt with the Bill. I send my best wishes to the noble Earl, Lord Ferrers. I have known him, man and boy, for 30 years. I look forward to seeing him carry this Bill through. He has been unable to be with us, but I wish him well. I hope that when the Bill has been through another place it will return to us in a further improved condition and we may then set about improving it even further.

My Lords, I, too, am glad to hear that the noble Earl, Lord Ferrers, is recovering from his illness. I hope he has not had to worry about whether it was a structural or a process plant defect, and whether it was demolition or construction!Whatever it was, I hope that he has been paid and that his subcontractors have been paid. We certainly wish him well.

This has been a most interesting experience for me. I am grateful for the understanding of the House to a new Member. For me Part II of the Bill is important. That is the Government's response to the demands of the construction industry for a simple, effective, cheap and, most importantly of all, non-legalistic procedure for the resolution of disputes.

The Bill tries to give the industry what it wants. Today I happened to see a story in the Daily Star which sums it up. A small contractor put down a new car park for his local Burger King in Northamptonshire and the article absolutely had to be headed "Burger Sting". After he had put it down, his client went into liquidation, so he was not paid. The client had a separate company which was the concessionaire for the operation, so the small contractor felt that his client was still around even though he had not been paid. He took the law into his own hands and dug up the car park. I do not say whether that is right or wrong but I hope that the Bill will provide such a contractor with comfort and enable him to be paid for what he did, presumably after he has put the beastly car park down again.

At the start we had a post-Latham feel-good factor, with the support of the whole construction industry, including lawyers. That was important, and when they said it would cost them too much money, we should have been careful. Somehow, in the process, during the first few weeks something succeeded in turning an almost universal feel-good factor into a universal feel-bad factor. As I mentioned at Report stage, there was universal condemnation from the industry, possibly excluding the process industry, I do not know what the Government did, but it was quite an achievement. Possibly it was connected with the scheme and, as we mentioned earlier, the difference between arbitration and adjudication.

I have been heartened by the comments of the noble Lord, Lord Lucas, today and at previous stages about the Bill's objectives. They are to speed up the resolution and reduce the costs of the dispute, as well as to speed up payment. I am sure that the Bill will be improved in another place and I wish it well. The industry needs the measure desperately but the Government must listen to the industry before the Bill becomes law. They must sort out the problem of how many schemes we have for England, Scotland, Wales and Northern Ireland.

It is equally important that the industry make its individual and collective voices known to the Government again and again. Both sides must stay with it. I sincerely hope that they do; if so, the construction industry will be the better for it.

My Lords, I wish to say how much I appreciate the way in which my noble friend Lord Lucas has dealt with the anxieties that I have about the Bill. He has listened to them, discussed some of them with me between stages and copied correspondence to me that he has had with other Members of the House. Thus I and other noble Lords knew exactly where we were with the Government's thinking at any time.

As regards its effect on disabled people, the Bill has been improved as it has gone through the House. However, I am still concerned about the 12-month delay which may take place in the payment of mandatory disabled facilities grants. I hope the matter will be re-examined as the Bill goes through the other place.

I am pleased that my noble friend took on board what I said about the definition of the disabled person at Committee stage and came back with his own amendment on Report. There may need to be some further tinkering with it in the other place. I am sure that my noble friend, his officials and the Minister who will take the Bill through the other place will give it their consideration.

I am also grateful for my noble friend's offer to discuss Part M of the building regulations; I used the Bill as a vehicle once again to raise the matter in the House. I am grateful and look forward to the meeting we shall have in the not-too-distant future when I hope we can make progress.

I have one other point. If amendments are requested in the other place which are not necessarily to the Government's liking because they do not like the way in which they are drafted and their thinking is not yet finalised, I hope that the Government will accept those amendments. If they are not accepted in the other place, it will not give the Government or this House the opportunity of discussing them and throwing even greater light on them when the Bill returns here. I sometimes have the feeling that the Government resist amendments when they are not sure and neglect the opportunity to discuss them when Bills are returned to the House of origin. Further discussion could usefully be employed on this Bill because it is complicated.

My Lords, I was glad to hear from the Minister that the noble Earl, Lord Ferrers, is recovering from his travails. Together with everyone else in this House, I hope that he will grace these Benches as soon as possible. While he is a robust Member of the House, he has always treated me with courtesy, for which I am glad. The noble Lord, Lord Lucas, has also been courteous in his contributions during deliberations on the Bill. I am grateful not only for his responses at the Dispatch Box—however limited, because of his brief—but also for the letters which he and his colleagues have been kind enough to send me on different subjects between stages.

I also thank the Minister for the modification—I choose the word carefully—of the prior qualification period for home improvement grants. As the Bill proceeds to the next stages, I hope that the Government will go even further and take out any reference to prior qualification periods. When the other place considers Part I, I hope that it will recognise that the imperatives of that provision are to help poor people to modernise run-down homes and provide disabled facilities, as well as to encourage the investment of private funds in the housing market and the modernisation of housing units.

One of the difficulties with which we are faced in Part II is how the parliamentary draftsman responds to a technical subject. I offer that as an excuse for the Government not getting it quite right and not even getting it right at this stage. In its consideration of Part II, I hope that the other place will recognise the essence of the Bill. It is to seek to redress the imbalance of power which operates in the construction industry. The Bill should provide a fall-back position to protect the contractual relationship between a small power beset by a larger power. The relationship between a more powerful and a less powerful individual or company is not always the root of the problem in disputes on construction contracts. However, the problems and unfairness that can arise from the imbalance of power spills over into other areas where there may be a balance of power. I hope that the Government and the other place will recognise that and take the advice that this House offers freely that Part II should seek to provide a fall-back position to prevent the abuse of power.

During consideration of Part III, I was glad to support the architectural profession. That was not made easy for me, and I suspect for other Members of your Lordships' House on this side of the Chamber, by the knowledge that the leadership of that profession is currently engaged in an industrial dispute with its staff about recognition of their union rights. It puts one in a difficult situation. One seeks to defend the rights of a profession to have some protection in law. Yet the leadership of that profession does not appear to recognise the rights of ordinary members of their staff to belong to a recognised trade union and to have negotiating rights. I hope that when the leaders of the architectural profession read these debates, they will recognise that they do themselves an injustice by their relationship with their workers.

I do not normally speak at this stage of a Bill. However, my reason for speaking is that I remember that we are summoned to Parliament to provide our advice. We are an advisory Chamber. I sincerely hope that the other place will read the debates in this Chamber, consider the amendments, and will recognise that in the deliberations that we have had on the Bill we do not seek to usurp the powers of Members of another place, or to dominate or tell Members of the House of Commons what to do. We seek to provide them with advice. They can take it or leave it. But the objective of all our deliberations is to do what we are summoned to Parliament to do: to give our advice. I hope that Members of another place will listen to that advice.

7 p.m.

My Lords, mine was essentially a walking-on part in the circumstances described when we reached Report stage. The noble Lord, Lord Howie of Troon, was generous enough to welcome my intervention and to go so far as to say—perhaps he went too far—that he wished that he had been able to put the issue,

"as concisely, correctly, totally and truthfully as [I] did".—[Official Report, 22/4/96; co1.997.]
All I sought to do was to disentangle the adjudication process from the provisions of the quite outstandingly excellent new Arbitration Bill, shortly to become the new Arbitration Act 1996. The nature of the adjudication process requires a quick, enforceable, interim decision which operates until practical completion. If not then acceptable, arbitration or litigation can deal with the outstanding dispute. That is based upon the philosophy of pay now, argue later; and its simple purpose is to keep the contract running and the payments coming in.

What was clearly envisaged by the Government's scheme was a fast-track arbitration, using the provisions of the new Arbitration Act which would result in a decision binding for all time and arrived at with totally unrealistic speed. Under the provisions of the new Act, there would be limited rights to apply to the court and the applications would be made by those who realised that if they allowed the decision to go against them it would be final. The net result would be that instead of having a quick and cost-effective dispute, the opposite would be the case.

I ask your Lordships to bear this factor in mind, because a lawyer comes in constantly for a sneer with regard to his so-called absorption with costs. I was approached, and addressed your Lordships' House, at the instance of the specialist Bars, of the Bar and the solicitors, who stood to gain a great deal by the more protracted and hostile proceedings of an arbitration than they would from the quick adjudication process.

I conclude my walking-off part by saying that I am grateful to the Minister for accepting the views which I and others expressed, and for undertaking to consult widely, and, if the consultation bore out the propositions that I and others submitted to him, to accept them.

My Lords, perhaps I may make a few points in answer to what has been said.

First, the noble Lord, Lord Monkswell, as is usual, caused me considerable consternation when he said (I believe that I cite him correctly) that he hoped my noble friend Lord Ferrers would be returning to "these" Benches. I hope that my noble friend has not been reconstructed that much; I have not been told so. Nor have I been told anything about the possibility of dropping Part The noble Lord, Lord Williams, gave me considerable concern when he mentioned that possibility. I looked across at the Benches opposite; those Members looked rather concerned too. We know nothing of it within the confines of this House.

In our turn, I believe that we may have caused considerable consternation with our original draft of the draft scheme. It has been much improved in this House. When the draft scheme goes out for consultation after Royal Assent there will be a great deal of talking with the industry which will doubtless improve the scheme yet again before the issue returns to this House. However, I can assure the House that when the scheme is finally published it will be accompanied by a pamphlet and other literature which will enable the average builder to understand what is going on.

Many noble Lords have said kind things about me. To the extent that those are deserved, they are due entirely to a most helpful and kind House which has at no time tried to stamp on this new boy; and to an expert and helpful team of officials. As has been witnessed by several speakers in the House today, they have responded promptly, efficiently and at great length. Many times they have agreed with points raised by noble Lords opposite. I hope that it has given noble Lords as much pleasure to be associated with that as it has given me.

With those words, I hope that the House will now pass the Bill.

On Question, Bill passed, and sent to the Commons.

London Local Authorities Bill Hl

Committed to an Unopposed Bill Committee.

House adjourned at eight minutes past seven o'clock.