Small Businesses: Retention

Debate between Lord Aberdare and Lord Henley

Wednesday 21st February 2018 Lords Chamber

[Lord Aberdare]

To ask Her Majesty’s Government, in the light of the loss of retention monies by small firms following the insolvency of Carillion, what steps they are taking to provide protection against such losses in the future.

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

My Lords, the Government are committed to improving payment practices. Our consultation on the contractual practice of cash retention, alongside a parallel consultation on the effectiveness of the 2011 changes to the Construction Act 1996, closed on 19 January. We are now considering the responses.

--- Later in debate ---

[Lord Aberdare (CB)]

My Lords, retentions as currently practised mean that not only do small construction firms have to wait to be paid for work that they have done, often for several years, but that when a client company becomes insolvent they never get paid at all. Carillion alone held some £700 million of retentions, which its suppliers have now lost. Can the Minister assure us that immediate steps will now be taken to protect small firms from the loss of funds they are owed—for example, by ring-fencing retention funds in secure trust accounts? Will he look at the 10-minute rule Bill recently introduced in the other place by Peter Aldous MP, with widespread cross-party and industry support, as a possible approach to achieving this? When will something happen after all the promises we have had over the years?

[Lord Henley]

My Lords, I agree with some of the noble Lord’s analysis about problems related to retention, a practice that is common within the construction industry but which has negative impacts. That is why we had the consultation, as I think he knows. We obviously want to consider the results of that consultation and in doing so we will look, as he has suggested, at Peter Aldous’s Bill and see whether it is appropriate that we can take further steps. But the consultation having been completed, we need to consider it first.

Thames Tunnel

Debate between Lord Aberdare and Lord Henley

Monday 18th July 2011 Lords Chamber

[Lord Henley]

My Lords, my noble friend is absolutely correct in talking about problems of drainage. We have seen, since Bazalgette built the original sewers some 150 years ago, a vast expansion of London, a vast increase in the number of people here, and a vast increase in the number of impermeable surfaces which allow water to drain off far quicker than it did in the past, creating serious environmental problems. As part of this process we need to look at all of those factors and all appropriate solutions.

[Lord Aberdare]

My Lords, in view of the fact that major projects such as the Thames Tideway Tunnel often fall short in delivering the environmental and community benefits expected, will the Minister consider encouraging Thames Water to establish an independent trust to provide a vehicle for ensuring that those benefits are achieved and maximised and that the tunnel project leaves a lasting legacy for London along the lines that Sir Joseph Bazalgette achieved with the original sewer project?

[Lord Henley]

My Lords, that is exactly what Thames Water is proposing in the plans. That is why it wants to consult on them and why it will have to go through the planning process in due course. At the end of that planning process we hope that it will be able to produce the right tunnel, in the right place, that will produce the right benefits.