Construction Sector: Roadmap to Zero Retentions

Debate between Lord Aberdare and Lord Callanan

Wednesday 15th December 2021 Lords Chamber

[Lord Aberdare]

To ask Her Majesty’s Government what steps they plan to take to support the implementation of Build UK’s Roadmap to Zero Retentions, seeking to eliminate cash retentions in the construction sector by 2025, further to its endorsement by the Construction Leadership Council on 9 December 2019.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the Government are working in conjunction with the Construction Leadership Council to support the implementation of the Roadmap to Zero Retentions. Work is being undertaken by the business model workstream of the council. This includes building on the work of the Get It Right Initiative, to drive improvements in quality and reduce the need for retentions through the construction industry and exploring alternatives to cash retentions.

[Lord Aberdare (CB)]

My Lords, the Build UK roadmap and its endorsement by the Construction Leadership Council demonstrate a welcome degree of consensus across the sector that action is urgently needed to eliminate the pernicious practice of retentions, as well as outlining a route to doing so. The Minister’s response indicated a sort of waiting game that retentions might die out of their own accord. There is a general feeling that legislation is needed to bring an end to retentions, so I ask him: what is the plan to reach the 2025 target date, and when will legislation be introduced to achieve it?

[Lord Callanan (Con)]

I understand that the noble Lord has strong feelings on this issue; indeed, we met to discuss this a few months ago and he has previously asked Questions on it, so I know his passion on the subject. The problem is that there is no general feeling that legislation is required. Some people passionately believe in the need for primary legislation, but obviously there is some opposition as well. We continue to believe that the best way forward is for an approach that all sides can agree on to be taken forward by the Construction Leadership Council.

--- Later in debate ---

[Lord Callanan (Con)]

As I said in response to a previous question, I agree with my noble friend that we need to try to drive some action in this area. But a statutory ban is a very blunt instrument, and it would be difficult without some alternative form of surety being put in place, so we are working with the industry to try to develop those models. My noble friend will know the issue very well from the work that she did.

[Lord Aberdare (CB)]

My Lords, the Minister mentioned the lack of consensus in this area. There is never going to be a complete consensus between one party which is withholding funds and the other party which is having them withheld. This is why action is needed by government to address the issue. I accept that the complete banning of retentions is a major step but that is why action is needed now to devise a path towards that eventual goal.

[Lord Callanan (Con)]

The noble Lord is partly right and there will always be some who will oppose it, but the Build UK Roadmap to Zero Retentions has been developed and is supported by its many clients. The construction firms and trade associations within the membership of Build UK, the Construction Products Association and the Civil Engineering Contractors Association, are supporting this initiative. There are some hopeful signs of consensus going forward.

Small Business Commissioner: Late Payments

Debate between Lord Aberdare and Lord Callanan

Tuesday 7th December 2021 Lords Chamber

[Lord Callanan (Con)]

That is a very good suggestion. I certainly will do that.

[Lord Aberdare (CB)]

My Lords, the Small Business Commissioner’s role is limited in relation to construction companies. For example, she can deal with complaints from small construction firms about payment disputes only with larger firms which are signatories to the prompt payment code. Why then can she not deal with the same complaints when the bigger firm is not a code signatory? Will the Minister look at extending the commissioner’s role to provide full support to small construction businesses?

[Lord Callanan (Con)]

I have had this discussion with the noble Lord before. The construction industry is different; there are adjudication processes already set up for it and we are also looking at the issue of payment retention, as the noble Lord knows well. It is a complicated issue. The legislation already precludes the application to the construction industry, because there is an adjudication code process already there.

European Union Touring Visas

Debate between Lord Aberdare and Lord Callanan

Tuesday 14th September 2021 Lords Chamber

[Lord Aberdare]

To ask Her Majesty’s Government, further to their announcement on 4 August that United Kingdom musicians and performers will not need visas or work permits for short-term tours in 19 European Union countries, what plans they have to seek similar arrangements for (1) mountain guiding professionals, and (2) other service providers whose livelihood depends on touring in European Union countries.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

The Government are committed to supporting individuals and businesses to adjust to our new relationship with the European Union. The types of activity that UK service providers can undertake without visas or work permits vary by country. We have published detailed guidance on GOV.UK to help business travellers navigate these rules. We engage regularly with our embassies and welcome the opportunity to speak with member states to improve mutual understanding of our respective systems.

[Lord Aberdare (CB)]

My Lords, many UK providers of specialist services across European borders—in sport, travel, events, cultural and creative industries and numerous other sectors—are deeply concerned at the risk of losing their businesses because of the omission of such services from the trade and co-operation agreement, and feel a growing sense of abandonment by Her Majesty’s Government. Many, such as mountain guides, hold advanced UK qualifications. What are the Government doing to accelerate the process for achieving the mutual recognition of such qualifications? What practical, immediate support will they offer to those service providers who can no longer operate under the terms of the TCA or within the multiplicity of different requirements for working in individual member states—including those under which the Government claim that visa-free and permit-free touring are possible?

[Lord Callanan (Con)]

The noble Lord asks a number of questions. This is a complicated area. Of course, the requirements differ by member state, and different qualifications and regimes are applicable in each member state. We are engaging with all member states through our embassies and contacts in the EU to try to improve the situation and provide advice, encouragement and support for them to liberalise their regimes and provide the service providers mentioned by the noble Lord with the appropriate support.

Post Brexit: Small Service Businesses

Debate between Lord Aberdare and Lord Callanan

Monday 24th May 2021 Lords Chamber

[Lord Aberdare]

To ask Her Majesty’s Government what assessment they have made of the impact of the United Kingdom’s departure from the European Union on small service businesses dependent on mobility between the United Kingdom and the European Union; and what support they have offered to such businesses to preserve their incomes and jobs.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the Government are committed to supporting SME owners from all parts of the UK. My colleague, Minister Scully, recently formed an SME action group, which meets regularly to discuss key issues. The EU-UK Trade and Cooperation Agreement supports small services businesses, ensuring that many business visitors can stay in the EU for 90 days of any six-month period without requiring a work permit. BEIS is currently expanding GOV.UK guidance on member states’ immigration systems.

[Lord Aberdare (CB)]

My Lords, numerous small UK providers of cross-border services, based in the EU, EFTA and the UK, have found their businesses under existential threat following Brexit, including IT consultants, translators, exhibition organisers, tradespeople, sailing-holiday providers, ski instructors, journalists, artists and, of course, musicians, to name just a few. They find it hard to get clarity on the rules now governing their activities or on where to get help to resolve issues. What guidance can the Minister offer to such service providers to help them find ways of saving their businesses and their livelihoods, and will the Government consider setting up something similar to the EU’s Your Europe Advice and SOLVIT services to support them?

[Lord Callanan (Con)]

The noble Lord makes a good point. This is a complicated area. We are upgrading existing GOV.UK guidance on the immigration systems of EU and EFTA member states to help businesses adjust to the new requirements. The first tranche of these guides is available now, and from 1 January 2021, for short stays of up to 90 days in any 180-day period, UK nationals will not need a visa when travelling to and within the Schengen area to undertake a limited range of activities.

Industrial Strategy: Local Growth

Debate between Lord Aberdare and Lord Callanan

Monday 26th April 2021 Lords Chamber

[Lord Callanan (Con)]

In the new plan for growth that the noble Lord refers to, we have decided that the Industrial Strategy Council in its current form will no longer be needed to monitor and evaluate the impact of the industrial strategy. The Prime Minister and the Chancellor have convened a build back better business council to act as a sounding board and to provide help, advice and support on the way forward.

[Lord Aberdare (CB)]

My Lords, the ISC report urges the Government to develop a comprehensive and ambitious labour market strategy, co-ordinated across government, employers and the education sector. What plans do the Government have for such an overarching strategy and for overseeing how their various skills-related initiatives mesh together to deliver a skilled and resilient workforce across the UK as needed by the plan for growth, and to close the future skills gap highlighted by the ISC?

[Lord Callanan (Con)]

The noble Lord is right that skills are one of our key priorities for investment, along with infrastructure and innovation. The Prime Minister and the Cabinet Secretary have asked Sir Michael Barber to conduct a rapid review of government delivery, including in the skills system, to ensure that it remains focused, effective and efficient and to suggest how it could be strengthened.

Construction Industry: Retention Payments

Debate between Lord Aberdare and Lord Callanan

Thursday 14th January 2021 Lords Chamber

[Lord Aberdare]

To ask Her Majesty’s Government what steps they have taken since the publication on 26 February 2020 of the responses to their consultation on retention payments in the construction industry.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

The Government, in conjunction with the Construction Leadership Council, are working to develop a sustainable strategy on retentions for the whole sector. During the current pandemic we have also provided guidance to the industry on responsible and fair contractual behaviour, including in relation to retentions. We are committed to improving payment practices and working with the construction industry to take this important matter forward.

[Lord Aberdare (CB)]

My Lords, it is three years since the Government’s consultation on retentions ended and, as we have been reminded today, three years since the collapse of Carillion, which led to small construction firms losing hundreds of millions of pounds in retentions. Retentions limit their ability to invest, grow, train staff, take on apprentices and, all too often, survive. The actions mentioned by the Minister are better than nothing but do not go nearly far enough. I have two questions. What are the Government doing now to prevent small construction firms, already under pressure from the pandemic, being crippled because funds properly belonging to them are being used by larger clients to prop up their own cash flows? When will the Government introduce the legislation reform that is recognised as the only way of bringing proper ongoing relief to these small firms?

[Lord Callanan (Con)]

I know that the noble Lord has been active for many years on this important issue. This has been a slower process than we might have liked, in part due to the complexity of the issues associated with the practice of cash retentions and the wide range of interested parties. While most in the construction industry favour or could accept change, unfortunately no consensus on a preferred solution has emerged from industry to date.