Businesses: Late Payments

Alan Brown Excerpts

Wednesday 19th June 2019 Commons Chamber

[Kelly Tolhurst]

I thank the hon. Gentleman for welcoming the statement and the moves that the Government have made today. He is absolutely right about the prompt payment code: it is voluntary. As it stands, there are more than 2,000 signatories to it; they sign up and commit to paying 90% of their invoices within 60 days. As he will know, the Government initiated the new duty on companies to report biannually on payment practices. To date, we have had more than 15,000 reports for over 7,000 companies. That data has enabled the Chartered Institute of Credit Management to scrutinise the voluntary code payment data.

We have seen action. Five businesses have been removed from the code and 12 have been suspended. As I have outlined today, when people are not complying with the legislation, we will take action. We are continuing to move forward to strengthen the prompt payment code and close any holes and weaknesses that there are.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

When it comes to cash retentions, the Minister said twice that it was up to industry to find a way forward, but they are actually a Government responsibility. It is about 40 years since it was first recommended that the use of cash retentions in the construction industry be phased out. In my time as an MP, the Government have consulted twice on the issue, voted down amendments to the Enterprise Bill, and refused to back both my private Member’s Bill and that of the hon. Member for Waveney (Peter Aldous). Instead of listening to the large, tier 1 contractors, will the Minister pledge to take action and give a timescale for the phasing out of the use of cash retentions in the construction industry?

[Kelly Tolhurst]

The hon. Gentleman raises the issue of retentions. He says that this is not for industry, but for the Government. I have spoken to industry representatives and businesses about this issue, and it is clear that the industry has not come to a single way forward to deal with this. We hope that the measures that I have announced today on supply chain finance will make a big difference. With regard to cash retentions, I have been clear that if industry cannot come to a consensus on a way forward, the Government will step in and take action.