Construction Industry: Retention Payments

Baroness Donaghy Excerpts

Thursday 14th January 2021 Lords Chamber

[Lord Callanan (Con)]

Those are two of the alternatives that have been suggested as a policy response. Changes in this area would require primary legislation, and there is always pressure on the Government’s legislative timetable. We think that working with the industry to seek a consensus is a good way forward, but there is not yet a consensus: some notable companies are against a deposit retention scheme or the other policy option the noble Lord mentioned.

[Baroness Donaghy (Lab) [V]]

I would like to thank the Minister and the noble Lord, Lord Stevenson, for referring to Lord O’Neill. We miss him and I am sure the industry misses him.

This has been going on for decades. The large construction companies that owe money to subcontractors use it as working capital. Having a retention fund would stabilise the industry and prevent job losses and redundancies. What priority will the Government give to taking long overdue action?

[Lord Callanan (Con)]

The noble Baroness is right: this has been going on for a long time and under many different Governments. The complexity of the issues is one reason why no action has been taken so far. As I said, we are committed to working with industry to find a consensus, and we are working with the Construction Leadership Council. We are committed to addressing the related issue of late payments, and we will try to find a consensus on a way forward.