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Mr. Dover: While welcoming the fact that reflection upon the legislation's passage through Standing Committee will assist the follow-up of the regulations after Royal Assent, should they not receive parliamentary scrutiny also? Should not the necessary clauses be carved out during the legislation's passage through Standing Committee? Perhaps my hon. Friend has set his mind against that course and is waiting for Royal Assent.
Mr. Jones: We are consulting about that, but the Bill provides for a statutory instrument approach. The House will have the chance to debate those matters if it so chooses and we shall see what emerges. There are several potential variants and we shall not prejudge what the final adjudication scheme will look like--that is in the hands of the industry.
Let me put beyond any doubt our intention that the scheme will come into effect only if construction contracts are deficient in any way. Our aim is to encourage the industry to get its contracts right. Furthermore, we are providing adjudication and not
arbitration. We intend to propose that parties be required to abide by an adjudicator's decision until practical completion of the contract, but that thereafter they may reopen the dispute.
I re-emphasise the remarks by my noble Friend Lord Lucas during debate in the other place. We do not intend that adjudication should be used simply to postpone resolving disputes. We have had enough of disputes within the construction industry. Government, the industry and its clients want to see an end to them: they are expensive and damaging to the industry's productivity and reputation. We want to see the industry using the opportunity that we are giving it to improve its payment record and to resolve disputes quickly, without dragging them into arbitration or before the courts.
We intend the Bill's provision to cover a wide span of the construction industry. After all, that industry asked for the Bill. It desperately wants revised payment arrangements and the ability to resolve disputes quickly and easily. The Government welcomed the debates in another place because they helped to refine and widen the definition of construction operations. We shall be tabling a number of amendments in Committee as a result.
Mr. Anthony Coombs (Wyre Forest):
Who will decide whether construction contracts include adequate provisions for payment or adjudication? If it is to be the Construction Industry Board or a similar organisation, there will be fears that contracts will have to be submitted very early in the construction process and that delays will be incurred while they are being considered.
Mr. Jones:
If the contracts do not meet the tests that I have set out, they will be in conflict with the law and, under the statutory instrument, they will be null and void. Therefore, any party to those contracts will be able to fall back on the scheme that we have prepared.
Mr. Coombs:
My question related not to the criteria by which those contracts will be null and void, but to who decides and when. That is a crucial matter for those entering such contracts.
Mr. Jones:
As I said, the decision will go back to the courts. If there is a problem with a contract that does not meet our particular test, any party to such a contract will be able to seek redress under the Government's fall-back scheme.
In respect of definition, we are currently looking at supply and fit contracts. It is not our intention that the Bill should apply to suppliers of building materials and components as other provisions, such as the Supply of Goods and Services Act 1982, apply to them. Some construction contracts, however, require the manufacture of specialist building components as well as their fitting--such as those in respect of air-conditioning equipment. We hope to extend the Bill's provision to those contracts. Such a change will be widely welcomed, especially by smaller specialist contractors in construction.
We are also clarifying the exclusion of process engineering that was mentioned by hon. Friend the Member for Chorley (Mr. Dover). Examples of that are oil refining and chemicals. There has been much unnecessary confusion. We want to make it absolutely clear that only
the plant and machinery and its associated steelwork are excluded from the Bill and not wider construction operations on process engineering sites.
The Bill also reforms the help that we give to the renewal of private-sector housing. It aims to give local authorities the flexibility that they need to direct resources effectively, giving help where it is most needed and to maximum effect.
We have come a considerable way from the days of wholesale and unquestioning slum clearance which could too easily destroy close-knit local communities. We have provided for the basic amenities--inside lavatories and separate bathrooms--and we now need to consider how the money available to help remedy the remaining unfitness should be used.
We have left behind the days when it was thought necessary to spread resources widely so that everybody got something. There are fewer unfit properties, with the number of unfit occupied private sector houses falling by 7 per cent. to about 1 million between the English house condition surveys of 1986 and 1991. One third of those could be made fit for under £500 each and are owned by people who could easily afford the cost.
We need to stand firmly on the principle that home owners are primarily responsible for repairing and maintaining their properties. In 1991 alone, home owners spent £20 billion on repairs and improvements to their homes. The need for public expenditure on private-sector renewal arises only where people really cannot afford to undertake repairs. It represents only about 2 per cent. of the total amount spent each year on repairs and renovation in the private stock.
Mrs. Helen Jackson (Sheffield, Hillsborough):
When examining grant aid to private and public home owners, did the Minister consider improving water efficiency and water safety in people's homes? I am particularly concerned about the replacement of lead piping in public and private-sector properties. The Institute of Plumbing is keen to promote that, partly because 50 per cent. of trainee plumbers finish their NVQ training without any suitable site experience. That problem would be redressed by a major programme of grant aid for lead replacement.
Mr. Jones:
The hon. Lady raises an interesting point and seeks to widen the definition of unfit. Hon. Members have made a number of suggestions as to whether the present definition applies to the modern world. The Bill does not alter that definition, but no doubt the hon. Lady will seek an opportunity to debate why not or whether it should be changed in one way or another.
We have to strike a balance between what central Government tell local government to do and what local government is left to decide for itself in targeting expenditure effectively. The Bill moves the balance towards local government following the principle that, as we move towards targeting expenditure at those in greatest need, we need to increase the decision-making power of local authorities in respect of priorities.
The current framework for renovation grants in the Local Government and Housing Act 1989 was set up to do just that. It was intended to encourage a more strategic and area-based approach to addressing the need for
renewal and renovation. It targeted help better on poor condition houses and poorer people and introduced a grant to give systematic help to disabled people. It also gave a right to mandatory grant to people on low incomes living in poor housing.
It gave local authorities a good range of tools, but experience has shown that the pressures for grant assistance have resulted in mandatory grants taking the lion's share of resources. That has distorted any strategy that local authorities may have developed and area-based activity has been undermined in many authorities.
The achievements of the current system are considerable. Nearly 500,000 grants have been awarded since 1990--170,000 of them were awarded to help make properties fit.
Mr. Gordon Prentice (Pendle):
Does the Minister accept that people with a legal right to mandatory grants did not get them and there was a de facto system of rationing? That is certainly the case in my local authority area in Pendle and elsewhere in north-east Lancashire.
Mr. Jones:
The hon. Gentleman highlights a point that has been raised many times by individual local authorities. It is precisely why almost all the local authorities that I met during my time as Minister responsible for housing told me that they wanted an end to the mandatory system which would also enable them to avoid the pepper-potting that occurs under the present arrangements.
Reform is necessary. In many areas, a strategic approach aimed at the renewal of an entire area or focused on particular problems is likely to be more cost-effective than meeting individual needs as they arise. Most local authorities accept that. What we hear from them--rather than from the local authority associations--is that the move away from the mandatory grant system will allow them to be more effective in using grant to meet their local needs and priorities.
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