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Earl Ferrers: The noble Lord, Lord Williams of Elvel, and I share a common approach to these matters. This part of the Bill and his amendment seemed to me to be perfectly reasonable and I asked similar questions to those which the noble Lord has asked me. The noble Lord, Lord Ezra, told us of his extensive experience at the National Coal Board and what happened there. I was

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surprised that the noble Lord, Lord Howie, knew about coal-mining. I expect he will tell us before long that he designed and constructed a coal-mine, too!

Lord Howie of Troon: I was too modest to make that claim.

Earl Ferrers: Modesty has always been one of the features of the noble Lord. Clause 102(2)(b) excludes the extraction of minerals, tunnelling or boring, or construction of underground works for that purpose. That excludes from the provisions of the Bill coal-mining operations and so forth. "Underground works" would not apply to projects similar to the Jubilee Line extension, because that is not excluded, but minerals and coal are excluded.

Lord Howie of Troon: There is no point in the Minister's merely repeating what is said in the Bill. We are trying to persuade him, as elegantly as we can, that the Bill is mistaken on this point. The point made by both the noble Lord, Lord Ezra, and myself is that a coal-mine is undoubtedly for the extraction of minerals but, in order to construct a coal-mine, certain operations are required which are undoubtedly construction operations because they are carried out by civil consulting engineers and civil contracting companies. Therefore, to exclude them, whatever is said in the Bill, is merely mistaken.

Lord Berkeley: I am not sure that the fact that the works are undertaken by consulting engineers or anybody else is particularly important to the argument, but I certainly support what the noble Lord, Lord Howie, has said. I should like to refer to something I mentioned in the Second Reading debate on this Bill. In the construction of a motorway, if an area of gravel has to be removed before an embankment is put on top, because that gravel is used for a purpose such as mixing concrete, it is technically classed as a mineral. If this exclusion stands, I assume this particular operation would be excluded from the Bill, which seems rather odd.

I also believe--although I stand to be corrected--that much of the excavation from the Channel Tunnel was mineral by definition because it was deposited in the sea and Eurotunnel had to get a licence from the Crown Estates to deposit it. I believe it had to pay something like £1 per cubic metre for the pleasure of leaving it where it should be--in the sea. I am not suggesting that the Channel Tunnel should have been excluded from this measure but, as regards minerals and motorways, this question will arise again and again. I hope that the noble Earl will be able to look at this again.

Earl Ferrers: As I said when we first started to discuss this clause, it is complicated and there are bound to be cases that we need to consider. I am happy to consider this. What I had not realised was that both the noble Lords, Lord Howie and Lord Ezra, were--according to the noble Lord, Lord Howie--wanting to impose upon the mining industry the provisions in this Bill which relate to the building industry. I was surprised when the noble Lord said that because I thought that they did not want that. Indeed, those involved in the majority of these large engineering processes do not want this part of the Bill

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applied to them. I shall give way to the noble Lord in half a minute. If the noble Lord thinks that they do want this measure, I shall certainly consider the matter. With regard to the point made by the noble Lord, Lord Berkeley, if one is dealing with mineral extraction, that is excluded from the Bill. If one is using the products of extraction, that is not excluded from the Bill if they are used for the purposes which the Bill seeks to cover.

Lord Berkeley: Without wishing to detain the Committee too long, would that mean that if the gravel extracted from under a motorway was sold to someone else it would be excluded from the provision but if it was used for the contract itself it would be included? That is another question.

Earl Ferrers: This is a fascinating series of questions. If I may, I shall take advice on that matter because we are getting into detail here. I would say, without giving any guarantee that I am right, that I should not have thought that if one is removing a piece of gravel from a roadway, that is regarded as mineral extraction. I should have thought it was a normal building process of removing that which was there. That is rather different to digging into a gravel pit. However, I shall consider this matter.

Lord Howie of Troon: I do not wish to impose anything of any sort on the Coal Board, or on almost anyone else come to that. I would merely remind the Minister that when the six coal-mines were constructed--I do not think one builds them; they are constructed in some way--the Coal Board was perfectly happy that they should be constructed under the normal conditions of contract which prevail in the construction industry. I am sure that if it was happy then, the Coal Board would still be happy now.

Earl Ferrers: At last the noble Lord and I are at one. He says that the organisation does not want this provision. We do not want this imposed on it, or upon any organisation if it provides its own contracts. In the experience of the noble Lord, Lord Howie, and the Coal Board, it made the arrangements and its own contracts and was quite happy. That is fine; that is exactly what we want. We only want this measure to apply in certain parts of the building industry where people have not made such provisions.

Lord Williams of Elvel: I am sure that the noble Earl has understood that this is a matter of considerable controversy. The noble Lord, Lord Ezra, has made his contribution, my noble friend Lord Howie has made his contribution and my noble friend Lord Berkeley has made his contribution. The whole question of what is extraction of minerals and what is construction of underground works for that purpose needs to be looked at again. I hope very much that the noble Earl will look at it again. The noble Earl and I agree that we are at the moment probing the meaning of what the Government are putting forward. I believe that the meaning of paragraph (b) is, to put it at its best, far from clear. It seems to me that my amendment is something that

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the Government really should take fairly seriously. However, I do not wish to prolong the debate because we shall come to a further debate on this whole question of Clause 102. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 130 to 133 not moved.]

Earl Ferrers moved Amendment No. 134:

Page 59, line 8, leave out ("storage") and insert ("bulk storage (other than warehousing)").

The noble Earl said: I spoke to this amendment with an earlier grouping of amendments. I beg to move.

On Question, amendment agreed to.

[Amendment No. 135 not moved.]

Lord Williams of Elvel moved Amendment No. 136:

Page 59, line 12, at end insert ("unless undertaken by the contractor").

The noble Lord said: I am advised--again I have to rely on advice--that there are many occasions on which the delivery of manufactured building or engineering components is carried out by the contractor. It therefore would seem there is a difficult dividing line between what is manufacture--which clearly is not construction--and what is construction. Again we are in a grey area. As I say, I can only take the advice that I have been given that there are many occasions on which contractors get involved also in the manufacture of small components. This paragraph (d) is unsatisfactory as it stands. I beg to move.

Earl Ferrers: The noble Lord refers in this amendment to a number of quite difficult matters. I believe that one of them would include the elements of the so-called "supply and fit" contracts and whether they would be incorporated in part of this legislation. We are sympathetic to the position of contractors who supply things and who then fit them. However, there are difficult problems in this area. I am bound to tell the Committee that it has been far from straightforward to produce a definition of the construction industry for the purposes of this Bill because it involves so many facets. Many different operations go to make a finished building and not all can be regarded as construction activities. Some, such as painting or welding, for example, are just as much part of other industries. What we have to try to avoid is drawing in work in areas which have nothing to do with construction.

What we want to do is to exclude manufacturing as such. The person who makes a hopper or a conveyor belt manufacturers those products. He ought not to be included in this Bill. Contracts solely for the sale and supply of goods are already subject to very different contractual arrangements and are covered by well-established legislation. I hope that few would argue that, where 95 per cent. of the value of a contract was in the manufacture and supply of a product, with just 5 per cent. in its instalment, it

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would be right to consider this as a construction contract. But the difficulty is where one draws the line. In extending these construction provisions to supply and fit contracts, we would start to cover a great deal of manufacturing activity.

Many specialist contractors are unmoved by such considerations, but there is one point that they might well consider. At the moment they are being paid to supply and fit items such as windows, boilers and air ducts, but what if we changed tack to include manufacturing and supply? If these elements were drawn in by the work of instalment, it seems likely that unscrupulous contractors would try to split them apart. They could buy the product from one firm and then get another to come and fit it. Such avoidance would be easy. I do not believe that that would do much good to anyone.

If a contractor was not using the manufacturer to install a piece of kit on site, with all the obvious advantages which this entails, there would be little incentive for him to look locally for its manufacture. He could fax his specifications abroad and just use the man down the road to fit the final product in place. I believe that that would be a recipe for import penetration.

I would hope that we would be able to use a degree of understanding about this. These matters are inevitably grey areas. We do not want to draw into them unnecessarily those who should not be drawn in.

5 p.m.

Lord Berkeley: We covered some of this issue on the Second Reading debate. I support the amendment. I give the example of a precast concrete beam on a building or a bridge. At present, the manufacturer of that beam is included in the provisions of the Bill if it is manufactured on the site and excluded if it is manufactured off the site. It is more efficient on most occasions to make these components off the site. The contractor may well choose to do it himself; he may well choose to buy it in. To some extent even Amendment No. 136 does not quite cover this point.

Perhaps I may put forward another idea: to exclude from the terms of the Bill the manufacturer of equipment which is not specific to the contract under discussion. If it is specific to the contract, I believe that it should be included.

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