My Lords, in moving Amendment 18L, I will also speak to Amendments 18M and 18N. I find myself in the unusual position of a public sector socialist politician putting forward some amendments nakedly proposed by industry. However, it seemed that the questions being posed deserved a response and a discussion. I hope the Committee will forgive me proposing these amendments as a bunch of probing amendments for the Minister to respond to.
The industry argues that Clause 18(3) creates uncertainty as to the contract price. It enables the contract price to be challenged at any time after it has been agreed if the party considers that adjustments under steps 2, 3 or 6 of Clause 17(2) were not appropriate. When approving or signing a contract, a board of directors will require certainty of income against which it can assess its cost estimates and associated risks. It contends that the sense of uncertainty over price may have unintended consequences for shareholder value, group decisions on where to invest, and the perception in the wider marketplace that the UK remains a good place to invest in and do business. It believes that the parties should have a limited time period in which to challenge the adjustments made in steps 2, 3 or 6 to reduce uncertainty, and that a period of six months from the date of price agreement is more reasonable.
The industry also argues that the grounds for a challenge need to be included in the Bill. There needs to be a material basis for the challenge such as that the adjustment has caused harm or disadvantage to one party. An error or an omission that has caused harm or disadvantage, and if corrected would give rise to a material adjustment, would be a more reasonable basis. Without materiality or a de minimis threshold, challenges could be made for trivial amounts. I beg to move.
4.45 pm