Small Businesses: Retention

Baroness Burt of Solihull Excerpts

Wednesday 21st February 2018 Lords Chamber

[Lord Henley]

My Lords, I am not going to comment on the first part of my noble friend’s question as that is obviously a matter for the official receiver and the legal authorities more generally. On his more general points about retention moneys, we believe they have negative impacts. We want to consider the right way forward, and will then take action.

[Baroness Burt of Solihull (LD)]

Retention has been described by the Federation of Small Businesses as a total scam. Now industry is coming together to abolish retention, to have project bank accounts to manage large procurement projects, and to remove the incentives for late payments and bad cash-flow practices by the Carillions of this world. I understand what the Minister said about considering the consultation, but will the Government join in and implement project bank accounts for large government projects?

[Lord Henley]

Again, my Lords, I am not going to make promises at this stage about what we will do because, as I made clear, we want to consider the consultation. We have also made clear that we recognise that retention, which is common in the construction industry, can have negative impacts. That is why we set up the Small Business Commissioner to assist on late payments. As the noble Baroness will be aware, we had a debate on that matter only the other day. Things are happening. Things will continue to happen. We will continue to look at that consultation and we will then take action.