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Lord Berkeley: My Lords, we discussed this matter in Committee but I am a little worried about the amendment of the noble Lord, Lord Howie of Troon. I am not sure how one recognises a civil engineering or building contract unless it happens to come within the terms of the noble Lord's special scheme. I refer to the words in the Bill,

It is a matter of trying to get to the site of the mineral extraction. I do not think there is much difference between tunnelling or boring. Usually it is the same thing. It might be a matter of drilling and blasting, boring with a machine drill, or building a shaft or underground caverns, or the kind of thing to which the noble Lord, Lord Howie of Troon, referred.

The real problem lies in defining whether one wishes to extract minerals, or whether one wishes to construct something else, and one uses what comes out--if I can

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put it crudely--as a mineral. I believe that on Second Reading or in Committee I referred to the fact that all the spoil that came out of the seaward drives of the Channel Tunnel--I declare an interest in regard to the Channel Tunnel--was strictly mineral because Eurotunnel had to pay a royalty to the Crown Estates. That is another good reason for leaving the Duchy of Cornwall out of this.

I can foresee lawyers having a wonderful time in the future defining what was the main purpose of a particular construction activity. It may be to extract coal or gravel. Who knows what will happen in the future? However, the situation is confusing at present. The amendment proposed by the noble Lord, Lord Williams of Elvel, goes some way to improving the position. I hope that the Government will look at the issue again because it is extremely unclear.

Lord Lucas: My Lords, as noble Lords clearly realise, we are dealing with one of the boundaries here and one can look at the issue either way. One can say, as we have done, that the best way to draw the boundary is for mining to be out. One then gets into the problem outlined by the noble Lord, Lord Berkeley. Alternatively, I can think of another problem: gravel was extracted in large quantities in order to make a boating lake. Was that in or was that out?

The noble Lord, Lord Ezra, and the noble Lord, Lord Howie, have quite correctly pointed out that mining operations commonly involve large contracts which we would all recognise as being construction and that in principle it would be nice to have those within the scope of the Bill. However, we have been unable to devise or to find solutions in the proposed amendments as regards exactly where those lines should be drawn.

The problem continues to rest on the difficulty of distinguishing between mining operations and civil engineering operations. We heard in Committee from the noble Lord, Lord Ezra--and we heard from him again today--that he had no difficulty distinguishing the two but no one has, as yet, suggested how this may be done satisfactorily in legislative terms.

It is true, of course, that with Amendment No. 126 the noble Lord, Lord Howie of Troon, has attempted the task for us. But I am afraid he has run straight into difficulties. It is perhaps worth pointing out that when the Department of the Environment conducted its consultation exercise on fair construction contracts last year, there was broad support for ensuring that the resulting provisions were not restricted to standard form contracts. We have therefore not sought to tie the application of Part II to the use of any particular type of contract, and it would be inconsistent of us to do so now.

It would also throw up all sorts of problems. We would need to establish what was meant by a,

    "recognised civil engineering or building contract",
as the noble Lord, Lord Berkeley, pointed out, and how that recognition could be updated from time to time. We would need to decide how to deal with contracts where provisions had been struck out, or where they had been

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inserted; and we would still be left with the prospect that, even with the amendment of the noble Lord, Lord Howie of Troon, in place, any party could simply avoid these provisions by insisting on using a bespoke contract. In other words, the noble Lord's amendment would have little effect.

The Government are not unsympathetic to these amendments, but we genuinely believe that in achieving their intent we would throw up too many additional complications. However, we shall look again carefully at what has been said today. If we can offer any prospect of a way forward we shall let noble Lords know by Third Reading.

Returning to the question asked by the noble Lord, Lord Berkeley, as regards the use of excavated material, I can do no better than to repeat the advice I gave to the noble Lord, Lord Williams, in our letter of 16th April. Where material such as gravel is taken from an area not otherwise involved in the construction process and used in that process, this would count as mineral extraction. In contracts for work involving borrow pits, parties may choose to extend the terms of the legislation by contract to the whole of the process, but the pit which is not otherwise involved would be outside the terms of the construction contract.

Lord Williams of Elvel: My Lords, I am grateful, as always, to the noble Lord for his response to my amendment and for the expression of sympathy from the Government on the thrust of the amendment.

I recognise that this is a difficult area. However, it is for the Government to solve difficult problems. I hope that by the time we come to Third Reading, the Government will have had further thoughts and will have been able to solve the problem with the sympathy which the noble Lord expressed this afternoon. In the light of what the Minister said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Howie of Troon had given notice of his intention to move Amendment No. 126:

Page 59, line 14, at end insert ("except insofar as this work is carried out under a recognised civil engineering or building contract").

The noble Lord said: My Lords, my blood ran cold when the Minister said that he sympathised with my amendment because in my experience that is usually the nail of doom.

The noble Lord is quite right. I admitted that the wording of the amendment was my own and therefore might not have met his high standard. I recognise the difficulty of using the word "recognised" as regards a form of contract. I accept that as a real objection to my amendment. However, I remind noble Lords that in other parts of the Bill the word "adequate" was considered adequate for the Government's purposes. Using the words of the Bill, perhaps the words "an adequate civil engineering or building contract" might be the way to phrase the provision. I put that thought to the noble Lord for further consideration.

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I am glad that the Minister's mind is not closed on the matter. With those brief, and I hope not unwelcome, remarks, I shall not move the amendment.

[Amendment No. 126 not moved.]

Lord Williams of Elvel moved Amendment No. 127:

Page 59, line 15, after ("plant") insert ("or").

The noble Lord said: My Lords, the amendment stands in my name and in the names of my noble friends Lord Dubs and Lord Howie of Troon. It may be for the convenience of the House if I speak also to Amendment No. 128.

The purpose of the amendment is simple. It is to challenge the exclusion of steelwork from construction operations. I am advised that, unless otherwise specified, steelwork is an essential part of construction activity and construction operations. I see no reason why in the provision,

    "construction, installation or demolition of plant, machinery",
and so on, steelwork should be included where there is a primary activity of whatever it may be.

We discussed this issue in Committee. My noble friends Lord Howie and Lord Berkeley introduced several examples of steelwork being part of the construction operation, even under paragraph (c) of the provision. I see no reason why the Government cannot respond to that. I beg to move.

Viscount Ullswater: My Lords, I believe that the inclusion of the word "steelwork" in this provision is confusing. Therefore I ask my noble friend to give consideration to Amendment No. 128. I should have thought that the word "plant" would be sufficient to include the kind of steelwork to which we refer. The subsection deals with the process industry.

Perhaps I may put it another way. The difficulty has already been recognised by the Government in the amendment that they put forward at Committee stage. They included--that is, excluded from the exclusion--warehousing when they sought to make clear the meaning of bulk storage, especially when considering its application to food and drink.

I shall wish to speak later to an amendment which deals with steelwork. However, I ask my noble friend to consider carefully whether there might not be some confusion as regards the word "steelwork" in this subsection of the Bill.

Lord Elton: My Lords, perhaps I may add a request to what my noble friend has said. Perhaps he will explain to me as a layman what will happen when a high-rise block is built: all the works after the foundations are set are steelworks and the building is put on to the steelwork afterwards. Am I using the term in a sense not intended in the Bill? If not, what will be the effect of the inclusion of the words which the amendment proposes to take out of the Bill on contracts for the construction of that kind of building?

5.30 p.m.

Lord Berkeley: My Lords, perhaps I may respond to the noble Lord, Lord Elton. The amendment refers to

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steelwork and plant and machinery in respect of the process plant. We discussed the point earlier when I spoke to another amendment. I was pleased to hear the comments of the noble Viscount, Lord Ullswater, about the problems of the steelwork industry. Its representatives have written to us and said that the industry is beset by bad payment practices. The whole purpose of the Bill is to try to avoid bad payment practices, and they are what the Bill seeks to overcome. That is the strong message from those who put up steelwork--that is steel frames around process plants, water treatment plants and anything else that is included in the provision--and I urge the Government to reconsider the point. It may be perfectly adequate for plant or machinery, but, for the reasons which I mentioned earlier, steelwork needs to be included in the Bill. Therefore, I support my noble friend's amendment.

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