House of Commons Amendments

Session 2014 - 15
Internet Publications
Other Bills before Parliament

Public Bill Committee:
62

, continued

Ian Murray

Mr Iain Wright

Toby Perkins

Clause  6,  page  8,  line  17,  at end insert—

“(2A)
The Secretary of State may by order specify the information that Commissioners

are permitted to disclose.”.

Member’s explanatory statement

This amendment strengthens the safeguard in subsection (2) restricting the information that can

be disclosed.

Ian Murray

Mr Iain Wright

Toby Perkins

Clause  9,  page  10,  line  21,  at end insert—

“(3A)
Prior to the commencement of section (1) of the Export and Investment

Guarantees Act 1991, as amended, the Secretary of State shall—

(a)
commission an independent assessment of the functions and powers of

UK Export Finance (UKEF);

(b)
make a report to Parliament of steps to be taken in response to the

findings of the assessment referred to in paragraph (a);

(c)
commission an assessment to determine actions to improve the

awareness of UKEF to small and medium-sized enterprises.”.

Member’s explanatory statement

This amendment aims to require the Secretary of State to assess the powers and functions of the

UKEF and require the Government to reform and relaunch the organisation.

Matthew Hancock

Jo Swinson

Clause  11,  page  11,  line  30,  after “delivered” insert “on or in connection with

presentment or payment (including after presentment or payment or in connection with

dishonour for non-payment)”

Member’s explanatory statement

This amendment clarifies that the provision disapplying requirements to exhibit, present or deliver

an original physical instrument which is presented electronically has effect in respect of such

requirements arising at any time, including any requirement to deliver an instrument after it is

paid.

Ian Murray

Mr Iain Wright

Toby Perkins

Clause  11,  page  12,  line  8,  at end insert—

“(6)
Where an instrument is presented for payment under this section, the responsible

bank will be required to ensure the validity of the electronic image as being from

Public Bill Committee:
63

, continued

the person who signed the cheque and mechanisms for this will be specified in

regulations under this section.”.

Member’s explanatory statement

This amendment aims to increase assurance over the validity and security of electronic cheques.

Matthew Hancock

Jo Swinson

Clause  11,  page  13,  line  30,  at end insert—

“( )
in relation to an instrument which is not a bill of exchange or promissory

note, references to the holder are to the payee or indorsee of the

instrument who is in possession of it or, if it is payable to bearer, the

person in possession of it.”

Member’s explanatory statement

This amendment clarifies that the term ‘holder’ in section 89D of the Bills of Exchange Act 1882

(inserted by clause 11) is used in relation to all types of instrument, and not just those types of

instrument in relation to which ‘holder’ is currently defined in the 1882 Act.

Matthew Hancock

Jo Swinson

Clause  11,  page  14,  line  19,  at end insert—

“( )
The amendments made by this section have effect in relation to presentment of

instruments after it comes into force, including instruments created before that

time.”

Member’s explanatory statement

This amendment clarifies that the provisions about electronic presentment of instruments have

effect in relation to any presentment or purported presentment after commencement of the

provisions, including presentment or purported presentment of instruments or images which were

created before commencement.

Debbie Abrahams

Clause  11,  page  14,  line  19,  at end insert—

“PART 4A1

PROTECTION OF RETENTION MONIES IN THE CONSTRUCTION INDUSTRY

89A1
Interpretation

(1)
In this Part—

“adjudication” and “adjudicator” have the meaning given to it in section 108

of the Housing Grants, Construction and Regeneration Act 1986 (as

amended).

“bank” has the meaning given to it by section 2 of the Banking Act 2009.

“construction contract” has the meaning given to it by section 104 of the

Housing Grants, Construction and regeneration Act 1996 (as amended).

“construction operations” has the meaning given to it by section 105 of the

Housing Grants, Construction and regeneration Act 1996 (as amended).

“payee” refers to a party providing construction operations under a

construction contract who is entitled to a payment in respect of such

operations.

Public Bill Committee:
64

, continued

“payer” refers to a party procuring construction operations under a

construction contract upon whom is placed an obligation to ensure

payment is made in respect of such operations.

“retention monies” means sums of money withheld by or on behalf of a

payer from monies which would otherwise be due under a construction

contract the effect of which would provide the payer with security for the

current and future performance by the payee of any or all of the payee‘s

obligations under the construction contract.

(2)
In this Part, reference to “account” is bank account established in accordance with

section 144.

89A2
Status of retention monies

(1)
Where under a construction contract the payer withholds retention monies from

the payee the monies must be held in trust by the payer on behalf of the payee as

beneficiary.

(2)
The payer must establish a separate and independent account at a bank for the

purpose of depositing the withheld retention monies and must notify the bank

that—

(a)
the payer holds the retention monies on trust in accordance with the

provisions of this Part; and

(b)
that the payee is the beneficiary.

(3)
The status of the payer as a trustee of the retention monies does not preclude the

payer having access to the retention monies in accordance with section 147.

89A3
Duties of the payer as trustee of the retention monies

(1)
The payer shall be solely responsible for any costs uncured in establishing and

maintaining the account.

(2)
The payer shall issue the payee with the details of the account and at the request

of the payee issue the payee with the current statement of the monies held in the

account.

(3)
The payer shall deposit the retention monies in the account immediately

following their withholding.

(4)
Any interest paid by the bank in respect of the retention monies held in the

account shall accrue to the payee.

89A4
Failure to comply with sections 144 and 145

(1)
Where the payer fails to comply with any of the requirements in sections 144 and

145 the provisions of the construction contract permitting the payer to withhold

retention monies from the payee shall be of no legal effect.

(2)
Where subsection (1) applies the payer shall refund immediately to the payee any

retention monies withheld and, to the extent that the retention monies are not

refunded, those retention monies shall be recoverable under the relevant

construction contract as a debt exclusive of any right of sett-off or counterclaim.

89A5
Release of retention monies from the account

(1)
Subject to subsection (2) the payer shall instruct the bank to release the retention

monies to the payee on or before the date specified for release in the construction

contract and, at the same time, issue the payee with a copy of the instructions to

the bank.

(2)
Subsections (3), (4), (5) and (6) shall apply where the payer has issued a notice to

the payee not later than 14 days before the date referred to in subsection (1)—

Public Bill Committee:
65

, continued

(a)
stating that the payee has not complied with the contractual requirements

for the release of the retention monies;

(b)
setting out the reasons for the non-compliance; and

(c)
stating whether the payer requires the release to the payer of all the

retention monies in the account or a specified amount representing part

of the monies in the account.

(3)
On receipt of the payer’s notice the payee may issue a written authorisation to the

payer to instruct the bank to release to the payer the whole of the retention monies

or a specified amount representing part of the retention monies.

(4)
On presentation by the payer of the payee‘s written authorisation the bank shall

release to the payer such of the retention monies as have been authorised for

release by the payee under subsection (3).

(5)
In the event that the payee does not issue a written authorisation under subsection

(3) or the authorisation only permits the release of part of the retention monies

which is less than the specified amount in the payer’s notice under subsection 2,

the matter shall constitute a dispute arising under the contract which the payer

may refer to adjudication in accordance with section 149 provided that—

(a)
no later than the date specified for release in the construction contract the

payer has issued the notice of referral; and

(b)
the notice of referral has requested the adjudicator to decide to whom the

retention monies shall be released either in whole or in part and, if in part,

to decide the amounts that shall be released to either party.

(6)
Whichever party is entitled to the retention monies following the adjudicator‘s

decision has authority to instruct the bank, on presentation of the decision, to

release the monies in accordance with that decision.

(7)
Subsection (8) applies where the payer has failed to—

(a)
instruct the bank in accordance with subsection (1); or

(b)
issue the notice in accordance with subsection (2); or

(c)
issue a notice of referral in accordance with subsection (5).

(8)
On the expiry of seven days after the date specified for release in the construction

contract the payee shall have authority to instruct the bank to release the retention

monies to the payee provided that the instruction to the bank states—

(a)
which of paragraphs (a), (b) or (c) in subsection (7) applies;

(b)
the amount of retention monies due for release;

(c)
the date in the construction contract by which the amount should have

been released; and

(d)
that a copy of the instruction to the bank has been issued to the payer.

(9)
Where the payer has discontinued an adjudication commenced under subsection

(5) for reasons other than a settlement agreed between the payer and payee, the

payee shall have authority to instruct the bank to release the retention monies to

the payee provided that—

(a)
the payee has presented the bank with a statement from the adjudicator to

the effect that the payer has discontinued the adjudication; and

(b)
that a copy of the instruction to the bank has been issued to the payer.

89A6
Conflict with provisions in the construction contract

These provisions shall prevail over any inconsistent express or implied terms in

any construction contract to which this Part applies but are without prejudice to

the right of the payer to have recourse to the retention monies in accordance with

the construction contract and section 147.

Public Bill Committee:
66

, continued

89A7
Disputes

In the event of any dispute or difference arising under the provisions of this Part

and subject to section 147 a payer or payee shall have the right to refer such

dispute or difference to adjudication in accordance with the Housing Grants,

Construction and Regeneration Act 1996 (as amended) and, where applicable, the

Scheme for Construction Contracts (England and Wales) Regulations 1998 (as

amended).

89A8
Guidance by the Secretary of State

(1)
The Secretary of State may issue any guidance as may be considered necessary to

facilitate implementation of the provisions in this Part.

(2)
The Secretary of State must publish any guidance or revised guidance issued

under this section.

89A9
Service of notices

Notices must be served in accordance with the provisions of section 115 of the

Housing Grants, Construction and Regeneration Act 1996 (as amended).

89A10
Periods of time

For the purposes of this Part periods of time shall be reckoned in accordance with

section 116 of the Housing Grants, Construction and Regeneration Act 1996 (as

amended).

89A11
Crown application

The provisions of section 117 of the Housing Grants, Construction and

Regeneration Act 1996 apply to this Part (as amended).”

Member’s explanatory statement

These amendments aim to require that retention monies provided for within construction industry

contracts are placed in an account, separate to and independent of those of the party withholding

the monies. That party is made a trustee of the monies, providing protection in the event of

insolvency. The release of cash retentions is expedited. The provisions apply to public sector

procuring authorities.

Matthew Hancock

Jo Swinson

Clause  12,  page  14,  line  23,  at end insert—

“(1A)
Section 58 (power to require disposal of interest in payment system) is amended

as provided in subsections (1B) and (1C).

(1B)
In subsection (1), for the words following “interest in” substitute “—

(h)
the operator of a regulated payment system, or

(i)
an infrastructure provider in relation to such a system,


to dispose of all or part of that interest.”

(1C)
After subsection (2) insert—

Public Bill Committee:
67

, continued

“(2A)
The reference in subsection (2) to a restriction or distortion of

competition includes, in particular, a restriction or distortion of

competition—

(a)
between different operators of payment systems,

(b)
between different payment services providers, or

(c)
between different infrastructure providers.””

Member’s explanatory statement

This amendment extends the Payment Systems Regulator’s power to require disposal of an interest

relating to a regulated payment system so that the Regulator may require disposal of an interest

in an infrastructure provider in relation to such a system.

Ian Murray

Mr Iain Wright

Toby Perkins


Clause  15,  page  16,  line  17,  at end insert—

“(cA)
an assessment of whether and, if necessary, the extent to which, any

business, having challenged a regulator, has been discriminated against

thereafter as a consequence.

(cB)
recommendations for mitigating steps to be taken if an assessment

mentioned in paragraph (cA) concludes that discrimination has taken

place.”

Matthew Hancock

Jo Swinson

Clause  16,  page  17,  line  24,  leave out from beginning to “subject” and insert

“Regulations under this section are”.

Member’s explanatory statement

This amendment corrects a drafting error (it is the regulations themselves that are subject to

affirmative resolution procedure and not the power to make them).

Ian Murray

Mr Iain Wright

Toby Perkins


Clause  23,  page  22,  line  34,  at end insert—

“(aA)
lay a statement of each amended thing before each House of Parliament

to be approved by affirmative resolution procedure before the

amendment is implemented;”

Public Bill Committee:
68

, continued

Ian Murray

Mr Iain Wright

Toby Perkins


Clause  29,  page  25,  line  26,  at end insert—

“(1A)
Prior to secondary legislation making or amending the regulatory provision

coming into force, the review set out in sections 25 to 28 and this section shall be

subject to public consultation with specific reference to the views of businesses,

business organisations, civic organisations and trades unions, and any such other

organisation which the Secretary of State considers to be appropriate.”

Toby Perkins

Mr Iain Wright

Ian Murray

Clause  30,  page  26,  line  7,  after “business””, insert ““medium-sized business”,

“large business” or “super corporate””.

Matthew Hancock

Jo Swinson

Clause  30,  page  26,  line  9,  leave out subsections (2) and (3) and insert—

“(2)
In the underlying provision “small business” means an undertaking other than a

micro business (see subsection (3)) which meets the following conditions (“the

small business size conditions”)—

(a)
it has a headcount of staff of less than 50, and

(b)
it has—

(i)
a turnover, or

(ii)
a balance sheet total,


of an amount less than or equal to the small business threshold.

(3)
In the underlying provision “micro business” means an undertaking which meets

the following conditions (“the micro business size conditions”)—

(a)
it has a headcount of staff of less than 10, and

(b)
it has—

(i)
a turnover, or

(ii)
a balance sheet total,


of an amount less than or equal to the micro business threshold.

( )
The Secretary of State may by regulations (referred to as “the small and micro

business regulations”) make further provision about the meanings of “small

business” and “micro business”.

( )
This section and the small and micro business regulations are to be read subject

to any modifications made by the underlying provision in any particular case.”

Member’s explanatory statement

This amendment defines “small business” and “micro business” by reference to staff headcount

and other conditions set out in subsections (2) and (3), replacing the previous definition referring

to Commission Recommendation 2003/361/EC. It also gives the Secretary of State power to make

regulations further defining these terms.



© Parliamentary copyright	Revised 21 October 2014