Small and Medium-sized Enterprises: Late Payments

Lord Cotter Excerpts

Thursday 19th June 2014 Lords Chamber

[Viscount Younger of Leckie]

The noble Lord refers to the construction industry, concerning roofing, if I read him correctly. We welcome the principles announced by the Construction Leadership Council to end the unfair use of cash retentions. The use of retentions is, I am pleased to reassure the noble Lord, in decline, with many of the construction industry’s better clients no longer withholding payments. Indeed, the Government have committed to reduce their use on their own contracts.

[Lord Cotter (LD)]

Will the Minister consider very carefully the issue of retention for the construction industry and, specifically, the roofing industry? Will he also give a firm commitment that he will listen to the Federation of Small Businesses and the construction industry, because there are considerable problems still, with over 50% of small businesses waiting for payment? Would he have a constructive consultation, because there have been concerns about them, to ensure that there are tangible measures in this Bill on the payment charter, for example, to make it more mandatory?

[Viscount Younger of Leckie]

I hope that I can assure my noble friend that, in addition to introducing the new reporting requirement, we are looking at giving suppliers more information on what to expect from their customers and therefore to be in a better position to make an informed judgment on whether to enter a commercial relationship, and how to negotiate fair terms or challenge unfair terms, as well as how to understand what they need to do to ensure that they get paid on time.